Economics of peace and conflict report english versioin

Economics of Peace and Conflict

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Economics of

Peace and Conflict

Myanmar Peace Monitor, Burma News International September 2013

www.bnionline.net www.mmpeacemonitor.org


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Title: Economics of Peace and Conflict

Written and edited by Myanmar Peace Monitor

Layout and Design by Yar Zar

First Edition, September 2013

Copyright reserved by Burma News International

Published by Burma News International

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Contents Glossary

Executive summary

Introduction ....................................................................................................................... 1

Economic Grievance 1: Increased militarisation and violence against

development projects ....................................................................................................... 3

Problem background

Attempted Solution 1: Non-State Armed Groups and Government/military

peace dialogue & code of conducts ................................................................................. 10

Attempted Solution 2: Tackling violence against economic projects and land

confiscation ...................................................................................................................... 11

Economic Grievance 2: Lack of ownership and management power over

natural resources ........................................................................................................... 11

Problem 1: Resource curse .............................................................................................. 11

Problem 2: Military and crony monopolization of the economy..................................... 14

Problem 3: Poor level of transparency, accountability and institutional

integrity ............................................................................................................................ 18

Problem 4: Centralisation of resource revenue and management ................................... 19

Attempted Solution 1: Institutionalising management power of natural

resources and revenues .................................................................................................... 23

Attempted Solution 2: Economics behind the Government‟s Disarmament,

Demobilisation and Reintegration plan ........................................................................... 26

Border Guard Force/People‟s Militia Force .................................................................... 27

Business demands and concessions in post-2011 peace negotiations ............................. 27

Role of Business Peace brokers ....................................................................................... 30

Politics of Foreign aid in development ............................................................................ 31

Attempted Solution 3: Improving governance within existing Constitution ................... 32

Attempted Solution 4: Transparency and Extractive Industries Transparency

Initiative (EITI) candidature ............................................................................................ 33

Economic Grievance 3: Land confiscation and rights ............................................... 36

Problem background

Attempted Solutions: Addressing land confiscation within existing

Constitution ..................................................................................................................... 38

Economic Grievance 4: Environmental and social impact of development

projects on local communities ...................................................................................... 42

Problem background


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Attempted Solution 1: Improving management and assessment of

development projects ....................................................................................................... 42

Attempted Solution 2: Corporate Social Responsibility.................................................. 44

Economic Grievance 5: Poverty and underdevelopment in ethnic

nationalities areas .......................................................................................................... 45

Problem 1: Underdevelopment of ethnic nationalities areas ........................................... 45

Problem 2: Balancing growth and sustainable development - lessons from the

1990s ceasefires ............................................................................................................... 46

Attempted Solution 1: Development projects related to peace negotiations ................... 47

Attempted Solution 2: Government‟s overall national and border area

development plans ........................................................................................................... 53

Border affairs ministry ..................................................................................................... 53

National development plans ............................................................................................ 54

Economic Grievance 6: Market competition between racial groups ........................ 58

Problem background

Attempted Solutions ........................................................................................................ 60

Observations................................................................................................................... 60

Government ..................................................................................................................... 60

NSAGs ............................................................................................................................. 61

Foreign Governments ...................................................................................................... 62

Businesses ........................................................................................................................ 62

Civil Society Groups ....................................................................................................... 62

Appendix......................................................................................................................... 63


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Acknowledgement

This publication would not have been possible without the active involvement of ethnic

armed groups, government, media and civil society groups across Myanmar. Their

experiences, combined with observations, explanations and recommendations, all

constitute the content and spirit of this publication.

The practical challenges faced in preparing this publication were numerous and varied due

to the sensitive and complex nature of the topic. The biggest difficulty was finding a way

to make a balanced, credible and reliable presentation.

The various partners in this project are united in their expression of profound gratitude to

Ms. Donna Ong for research and writing, together with Mr. Sai Leik, Mr. Nay Lin Htike

and Mr. Aung Kyaw Htun of BNI‟s Peace Process Monitoring Team. Special thanks also

goes to Mr. Khuensai Jaiyen, Mr. Khin Maung Shwe, Mr. Brennan O‟Connor and Mr.

Gary Rozema for their advice and invaluable support in the implementation of the project

and finalization of publication.

We are extremely grateful to the Burma Relief Center (BRC) and the many people who

supported the arrangement of the “Peace and Economics Seminar” in preparation of this

report. The insights and expertise of all the presenters and participants were invaluable in

enriching our overall understanding of the impact of economic policy and reform in the

context of Myanmar‟s peace process. These included representatives from BNI member

groups, Ms. Ah Nan (Burma River Network), Mr. Khur Hseng (Ethnic Community

Development Forum), Mr. Kyaw Khine (Arakan Oil Watch), Mr. Mee Reh (Karenni Civil

Society Network), Ms. Seng Mai (Kachin Development Network Group), Mr. Shwe

(Karen Environmental and Social Action Network) and Mr. Wong Aung (Shwe Gas

Movement).

The research, development and finalization of this publication were made possible through

generous financial contributions from the Open Society Foundations (OSF -

http://www.opensocietyfoundations.org). BNI also wishes to express its heartfelt thanks to

the OSF for its unwavering support for BNI‟s efforts to support the democratization

process during Myanmar‟s Peace Process.

Burma News International is a network of twelve independent media groups established in

2003.

The publication can be viewed at www.mmpeacemonitor.org and www.bnionline.net.

http://www.mmpeacemonitor.org/

http://www.bnionline.net/


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Glossary of acronyms

BGF Border Guard Force

CBO Community Based Organization

CNF Chin National Front

DDR Disarmament, Demobilisation and Reintegration

DKBA Democratic Karen Benevolent Army

EAGs Ethnic Armed Groups

KDNG Kachin Development Networking Group

KIO/A Kachin Independence Organisation/Army

KNLA Karen National Liberation Army

KNPP Karenni National Progressive Party

KNU Karen National Union

KPC KNU/KNLA Peace Council

MDRI Myanmar Development Resource Institute

MEC Myanmar Economic Cooperation

NDAA National Democratic Alliance Army

NDF National Democratic Front

NLD National League for Democracy

NMSP New Mon State Party

NSAGs Non-State Armed Groups

NUP National Unity Party

PDP Peace and Diversity Party

PMF People‟s Militia Force

PNLO Pa-O National Liberation Organization

PSLF Palaung State Liberation Front

RCSS/SSA Restoration Council of Shan State/ Shan State Army

SEZ/SIZ Special Economic Zone/ Special Industrial Zone

SLORC State Law and Order Restoration Council

SNLD Shan National League for Democracy

SPDC State Peace and Development Council

SSPP/SSA Shan State Progressive Party/ Shan State Army

TNLA Ta-ang National Liberation Army

UMEHL Union of Myanmar Economic Holdings Limited

UNFC United Nationalities Federal Council

UWSP/A United Wa State Party/Army

WGEC Working Group for Ethnic Coordination


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List of Map

1. Map of Natural Resources & Conflict Areas ...................................................... 4

2. Map of Natural Resources & Economics Zones ............................................... 12

3. Map of electricity usage in Myanmar and neighboring countries ...................... 56

List of Table

Table 1: Clashes Caused by or near development projects ............................................. 5

Table 2: Violence and civil unrest related to economic projects and land

confiscation ..................................................................................................................... 8

Toble 3: Legislative power – contentious issues in the Constitution ............................ 20

Table 4: NSAG businesses ............................................................................................ 27

Table 5: Important new laws and committees related to land grabbing ....................... 37

Table 6: Investigating committees and draft bills designed to tackle land

confiscation ................................................................................................................... 39


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Executive summary

The attention on business concessions and economic development in peace negotiations is

a highly controversial issue that many believe compromises the core question of political

and national identity issues. However it is important to recognise that major grievances

that fuel conflict are related to economics, namely negative impacts of development

projects on local communities and competition over control of economic resources

between local ethnic groups and the central government. Moreover, Non-State Armed

Groups (NSAGs) themselves realise that fighting for the rights of their people cannot avoid

the question of economics as money and power are inextricably linked.

This report explores the economic roots of conflict in an attempt to identify peaceful

solutions. It observes six main economic grievances that drive conflict in Myanmar, and

tries to analyse the different measures being taken to address each of them. These

grievances include increased militarisation of economic projects, lack of ownership and

management power over natural resources, land confiscation, environmental and social

impact of economic projects, poverty and underdevelopment in ethnic nationality areas.

The reformist government has tried to respond to each of these grievances by initiating a

multitude of bills, policies, development plans, commissions and committees under the

existing constitution. NSAGs have tried to address these issues, sometimes independently,

but more often through demands in peace negotiations with the government. Civil society

groups also play an active role in voicing local needs and grievances that are important in

informing sound decision making for policy solutions. International aid supports these

different actors and reforms through financial and technical assistance.

Analysing the wide-ranging attempts to address economic grievances reveals an important

discovery that the key hindrance to ongoing reforms and implementation of peace

agreements is the continued power of the military over the economy and government

administrative structure. Its own economic interests and ideologies in dealing with NSAGs

inevitably put them in opposition to the government‟s plans to change existing power

structures. The centralisation of key ownership and management power over natural

resources stipulated in the 2008 Constitution also mean that the government‟s enthusiasm

for decentralisation reforms will not solve the ethnic struggle.

The military's legacy may explain why - despite the many attempted solutions - conflict

has not abated and locals have yet to witness major improvements in their lives. Ensuring

that these solutions can succeed in achieving real change and sustainable peace will not

only rely on great skill but reforming the old powers of the military and transforming it

into a professional defence army. Understanding the underlying economic interests of

competing groups in Myanmar is therefore critical in achieving the much desired peace

and stability.


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Website of BNI Members


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Introduction

The issue of business interests and development in the peace process has

become a controversial yet unavoidable topic in efforts to resolve ongoing

conflict in the country. While many are worried that business is taking

precedence over politics in the peace negotiations, the demands of NSAGs

for business concessions, development and fair distribution of natural

resources are a reminder that ethnic leaders recognise that economic power

and political power are two sides of the same coin. At the same time,

business concessions in ceasefire talks are also seen by some to be a ploy by

the government to turn ethnic leaders into “mini-cronies” while also

performing a public relations stunt to attract more foreign investors.

Economics is therefore both a driver and a solution to the conflict in

Myanmar. Unfair distribution of resource revenues, negative impacts of

development projects on locals and high levels of poverty have led to three

types of violence: armed conflict, violence against development projects

and communal conflict. Increased militarisation over protection of large

project sites has also been identified as the cause of ongoing clashes

between NSAGs and government forces. At the same time, development

projects and business opportunities are crucial in alleviating poverty and

sustaining NSAGs‟ power and survival throughout the duration of the peace

process.


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The question therefore is not whether to include economics in discussions on political

settlement, but rather how to ensure that they address local grievances and prevent further

conflict that could threaten to reverse the positive reforms since 2011. As much of the

world is excited about the new prospects of Myanmar‟s “new frontier”, the vast potential

of virgin markets and abundant natural resources intensifies pressure on all sides struggling

for control over the revenues. The desire for rapid growth also raises concerns that

premature exploitation of natural resources and markets in conflict sensitive zones could

disrupt fragile ceasefires. While natural resources can quickly provide massive wealth, the

extractive industry is at risk of concentration in the hands of a few which could increase

local grievances over social injustices and environmental damage.

Economics is entangled with a diverse range of issues including legal land rights, land

confiscation, transparency, governance, military strategy, political reform, rural

development, social development and the politics of large development projects.

Economics for peace, therefore, not only involves discussing economics in peace

negotiations between government and NSAGs but also the need to improve broad-based

development that will benefit and protect individuals. These discussions should also

include general governmental reforms to ensure administrative and legal capability to

properly carry out these projects for long term sustainable peace and stability. While the

government says it has taken major steps to address many economic grievances they are

not always coherent and easily understood.

This report aims to clarify the complex processes of solving economic grievances related

to the peace process. Examining how these efforts work and how the different actors,

policies and projects make up a larger framework may help in assessing how well they

respond to the roots of conflict. It especially tries to understand how the many different

ministries, committees, international donors, CBOs, businesses (domestic and foreign) and

NSAGs work together, overlap, or contradict each other in achieving economic and

development goals for national peace.

The current contradiction between simultaneous peace talks and violence can perhaps be

attributed to the continued dominance of the military in the market and all levels of

administration. The military‟s special powers allow it to follow its own command, which

frequently contradicts the government‟s. This poses a serious challenge to enforcing terms

signed in peace deals, as well as implementing President Thein Sein‟s ambitious economic

and political reforms. Among the many issues involved in tackling power sharing and

economic fairness, conducting military reforms will be a decisive factor in the success and

speed of achieving peace and development.


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Economic Grievance 1: Increased militarisation and

violence against development projects

Problem background

The government‟s efforts to step up military protection around large scale economic

projects were the decisive factor sparking the renewed conflict with the KIA. The 17-year

ceasefire ended on June 9, 2011 when government troops and KIA forces clashed after the

KIO defied repeated orders by the military to move their base near the Sang Gang

Hydropower Dam on the Taping River. Several “mega projects”, commenced after

ceasefire agreements signed in the late 1980s to mid-1990s, have caused an increase of

military presence in ethnic areas to provide project security. According to the Kachin

Development Networking Group (KDNG), Myanmar government forces in Kachin state

have increased from 26 Infantry Battalions in 1994, to 41 battalions in 2006. By 2011, this

increased to over 100 battalions. Other groups such as the KNU have also complained of

an increase of military presence following the 2012 ceasefire. Many new ceasefire groups

continue to clash with government troops for refusing to evacuate bases near dam sites and

other industrial projects. Table 1 lists conflicts caused by or that occurred near

development projects.

A map of conflicts shows a strong correlation with strategically important areas near

hydropower dams and the Shwe gas pipeline that crosses Shan state en route from Rakhine

state to China. Fighting in Shan state has been most intense in the north near the gas

pipeline and dams. There are also occasional clashes around dams lower down the Salween

River.


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Table 1: Clashes caused by or near development projects

NSAG Economic project Townships Description

DKBA 1. Dams and road

construction

2. Gold mine

3.Hatgyi

hydropower dam

4. Myawaddy SEZ

Papun,

Hlaingbwe

Kawkareik

Myawaddy

DKBA clashed with Karen BGF around

dams, gold mines and road construction

areas. DKBA has had territorial disputes

with Karen BGF over the land near the

Myawaddy Special Economic Zone.

In 2006, the Hatgyi Hydro Power Project

stopped after two staff was injured by a

landmine explosion.

In 2009, the government army and

DKBA attacked the KNLA in the area of

the Hatgyi Dam construction displacing

4000 Karen.

In April 2013, BGF attacked DKBA near

the Hatgyi Dam site over territorial

disputes. Some believe that this was a

ploy by government forces that also

clashed with the DKBA on May 4, 2013

after they refused to abandon one of its

bases situated near the dam site.

KIA 1. Sang Gang

Hydropower Dam

Project on the

Taping river in

Kachin state

2. Myitsone Dam

3. Agribusiness in

Tanai township

4. Chiphwe dams

5. Logging

concessions in

Putao

6. Jade mines

7. Mines along the

Irrawaddy River

(especially Gold)

Machanba

w, Putao,

Waingmaw

, Moemauk,

Bhamo,

Moegaung

township

Clashes near Sang Gang Hydropower

Dam Project on the Taping River in

Kachin state on June 9, 2011 occurred

after the KIA rejected the government

army demands to withdraw from the area.

This clash broke a ceasefire agreement

signed in 1994.

KIO complained that completion of the

Myitsone Dam would restrict military

movements in the area.

Heavy fighting occurred in the jade rich

areas of Hpakant and other mines along

the Irrawaddy River.

Gun battles broke out in Machanbaw

township in Putao district near the

Chiphwe dams. This is also the location

of Yuzana‟s Agribusiness plantations in

Tanai township, and where Tycoon Tay

Zaw has logging concessions.


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KNPP 1. Ywar Thit Dam

2.Lawpita

hydropower dam

3. Mawchi lead

mine

Shadaw,

Bawlakhe

township

Local Karennis have a long standing

resentment against the dam projects

producing electricity for export, or for

city centres and not rural areas. The

KNPP attempted to blow up a power grid

prior to reaching a ceasefire agreement

with the government on March 7, 2012.

KNPP protested the Ywar Thit Dam

located on the Salween River in southern

Kayah state. They negotiated to have a

monitoring team the event it is built.

KNPP claims the dam will cause

problems for locals and restrict the

movement of their troops.

A clash occurred around the Mawchi lead

mine on June 29, 2012 where KNPP,

KNPLF and military UMEHL all have

concessions.

KNU 1. Wei Gyi Dam

2. Hat Gyi Dam

3. Dagwin Dam

4.Road

construction

Hlaing

Bwe,

Kawkareik,

Papun,

Hpa-an

township

In August of 2013, clashes broke out

between KNU‟s brigade 5 and BGF near

the Dagwin and Hatgyi dams in Papun

district.

KNU's brigade 7 and government forces

clashed on Sept. 12, 2013 in Hlaing Bwe

township close to Hatgyi Dam.

Shortly after the ceasefire in 2012, KNU

and government troops clashed along a

road construction project between Hpa-an

and Myawaddy.

KNU has complained that the Myanmar

army has increased battalions in Karen

state following the ceasefire. KNU

suspect the development projects are an

attempt by the government to occupy

their area.

RCSS/S

SA

1. Tasang

Dam

2. Mong Hsu

ruby mine

3. Logging

area

Mongton,

Mong Hsu,

Laikha,

Lang Khur,

Kunhing,

Mong Pan

RCSS clashed with the Myanmar army in

the area near the Tasang Dam in southern

Shan state despite a ceasefire agreement

signed on Dec. 2, 2011. Clashes also took

place around the Mong Hsu ruby mine,

Kunhein logging areas and Laikha.

The RCSS fought with the UWSA where

the latter has rubber plantations and other

agribusiness investments in Mongton and


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Mong Pan.

SSPP/S

SA

1. Shweli dams

2. Shwe Gas

Project (gas and oil

pipelines)

3. Tasang Dam

4. Mong Hsu ruby

mine

Namkham,

Kutkai,

Hsipaw,

Lashio,

Muse,

Mong Hsu

township

The SSPP/SSA and government forces

clashed multiple times in northern Shan

state where the Shweli dams and the

Shwe Gas pipeline are located.

The Myanmar army commanded SSPP

troops to withdraw bases from areas

around the Tasang Dam. Refusal of the

SSPP/SSA to leave the area has led to

many clashes despite a ceasefire

agreement that was signed on Jan. 18,

2012. The SSPP asked the Myanmar

army to withdraw from their operational

area if they are sincere about building

trust.

The Myanmar army and SSPP have also

clashed in the ruby mine area in Mong

Hsu township on July 10, 2013 and in

June of 2012.

TNLA 1. Shweli dams

2. Gas and oil

pipelines

Namtu,

Namkham,

Mantong,

Kutkai,

Muse, Nam

Kham

township

The Shweli hydropower dams and Shwe

gas pipeline cross the TNLA‟s

operational area in northern Shan state.

Clashes have been most frequent and

heaviest in this area. The TNLA has yet

to sign a ceasefire with the government.

The TNLA sees the military presence in

their operational area as a sign the

government does not want to achieve

peace by political means.

The TNLA also occasionally clashes with

poppy growing People‟s Militia Forces

(PMFs) during drug eradication

campaigns in their area.

Development projects and land confiscation have led to discontent among the local

population resulting in mass protests and even bomb attacks.


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Table 2: Violence and civil unrest related to economic projects and land confiscation

17 April

2010

Myitsone Dam Four bombs exploded in quick

succession in front of Asia World

Company‟s office. Another ten

exploded in two other villages.

According to the Kachin News Group,

four were killed and over twelve

people injured. *Mizzima News

reported that no one was killed and

only one Chinese worker was injured.

May 2011 Tasang Dam Several Chinese workers from the

Tasang Dam were abducted by

unknown armed men, but they were

later rescued by the RCSS/SSA-S.

Since then, security measures have

tightened at the project site.

29 Nov

2012

Letpadaung copper mine

More than 7,000 acres of land

from 26 villages were

confiscated and many families

were displaced.

Large demonstrations broke out

supported by protesters from across

the country (e.g. Mandalay and

Yangon). Official reports confirm that

police used white phosphorous to

suppress protestors near the mine site.

More than 99 monks and 10 villagers

were injured. Over a dozen protesters

were jailed, including the prominent

activist Naw Ohn Hla.

April 2013 Kyauk Phyu Project Since April 2013, twenty-seven

protest leaders have been charged

under Act 18 after more than 500

people protested against CNPC

(China National Petroleum

Corporation).1 Ten of the activists

have since been incarcerated.

16 May

2013

Land confiscation by PNO

militia

The NLD office in Mauksan village in

Shan state‟s Taunggyi district was

surrounded by about 30 armed troops

1 http://www.mizzimaburmese.com/news/inside-burma/14054-2013-09-13-03-46-05.html

http://www.mizzimaburmese.com/news/inside-burma/14054-2013-09-13-03-46-05.html


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from the PNO militia. The incident

occurred following an NLD-organized

protest against the seizure of 500

acres of farmland in Mauk San

village, allegedly by the militia. NLD

officials claim the armed group held

the villagers captive after they

ploughed the confiscated land.

June & July

2013

Irrawaddy delta wide protest

over land confiscation

Over 500 farmers were dealt a

strategic lawsuit against public

participation (SLAPP) for protesting

against land confiscation in 13

townships in the delta region. More

than 20 have been jailed and fined. In

June and July, the farmers protested

by ploughing land that was

confiscated by the military.

26 Feb

2013

Ma Lat To land conflict A policeman was killed, while

twenty-seven other officers and

nineteen protesters were injured after

they demonstrated against their land

being sold to a businessman.

9 Sept 2013 Italian-Thai Dawei Project Kaw Htee Lor (Thebyutchaung)

villagers east of Dawei blockaded a

road to protest the Italian-Thai

Development Company (ITD) for

refusing to pay the promised

compensation for properties damaged

by construction. They demanded 400

million kyat (about US$400,000) be

paid to the 30 affected Karen villagers

by the end of September.

19 Sept

2013

Naypyitaw land conflict Weigyi

village Pobba Thiri township

Villagers attacked police when they

tried to arrest a NLD member for

organizing a protest by ploughing

land confiscated by the Ministry of

Information. Three policemen and

five villagers were badly injured.


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Attempted Solution 1: NSAG and Government/military

peace dialogue & code of conducts

To tackle the problem of troop positioning and ongoing clashes between government and

NSAG troops, both sides have tried to settle the disputes though peace negotiations and the

development of codes of conduct. Difficulties remain, however, in deciding who exactly

controls and operates the contested areas. More importantly, serious challenges still exist

in enforcing signed agreements.

There remains a divide between the government peace team that signs the ceasefire

agreements with the NSAGs and the military commanders, who have seemingly separate

agendas. Many continue to rule by decree that does not adhere to rule of law. While some

attempts to communicate between NSAGs and regional commanders have been successful,

like the KNU, others like those in Shan state have failed due to personal reasons and

resistance from central command.

The causes of conflict remain disputed, each side blaming the other. For example, during

the Sept. 7-8, 2013 meeting between UNFC and the government peace team, UNFC

General Secretary Nai Hongsa told the Irrawaddy News that the government delegation

claimed there would be no fighting if ethnic armed groups refrained from attacking the

government-backed militias. Aung Min‟s six demands not to kill civilians, collect taxes,

recruit new members, intervene in the government‟s administration or initiate hostilities

with government-backed ethnic militias, also suggest NSAG responsibility for ongoing

clashes.2

Some NSAGs and civil society groups are calling for an end to all large scale development

projects within conflict sensitive areas before a consolidated peace and political settlement

can be reached. While NSAGs generally want development in their areas, some groups -

like the KNU and NMSP - say it is still too early for these types of projects. However,

other NSAGs differ and have asked for development projects for their regions in

government negotiations such as the CNF and RCSS. (See Economic grievance 4‟s

Solution 1: Development projects related to peace negotiations).

2 http://www.irrawaddy.org/archives/43660

http://www.irrawaddy.org/archives/43660


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Attempted Solution 2: Tackling violence against

economic projects and land confiscation

See attempted solutions to “economic grievance 3: Land confiscation” and “economic

grievance 4: Environmental and social impacts of development projects”.

Economic Grievance 2: Lack of ownership and

management over natural resources

Problem 1: Resource curse

Myanmar is a classic case of a resource curse where rich

natural resources create a paradoxical impact of conflict,

poverty and underdevelopment. According to Asian

Development Bank (ADB) and Accenture‟s joint report,

“New Energy Architecture: Myanmar”, published in June

of 2013, Myanmar has over 8.1 trillion cubic feet of

proven natural gas reserves and nearly 490 million tons of

estimated coal reserves. The country has 37 oil blocks in

operation, with 66 more having been offered over the last

two years. The country also has substantial reserves of

mineral deposits, including precious metals (gold,

platinum, silver); industrial minerals (tin, antimony, zinc,

copper, tungsten, lead, rare earth), stones (jade, marble,

limestone); precious gems (ruby, sapphire, spinel, pearl);

timber (teak and hardwoods), as well as rich agriculture,

fishery and forest products.

Local grievances run high as people suffer the consequences of mega projects, including

land confiscation, forced relocation or environmental and cultural destruction but do not

receive any share of the profit. In cases of energy extraction projects like hydropower

plants, many residing nearby are still living without electricity. The tyrannical attitude that

perpetuates this disregard and disrespect of local populations is a major source of both

distrust and resentment towards the central government by the affected civilians and ethnic

armed groups. Poverty, a lack of opportunities for youth and nationalist sentiments that

arise from this injustice are important factors that drive people to join ethnic armed groups.

According to a Rakhine NSAG commander who wished to remain anonymous, his most

important demand from the government is a guaranteed fair share of profits from his state‟s

natural resources for locals.3

3 Interview conducted in Chiang Mai, January 2013.


12


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Economic overdependence on natural resources, gross mismanagement and a general lack

of transparency has resulted in the concentration the nation‟s wealth in the military and its

cronies, who hold most of the political power. This also reveals the military‟s role as an

economic actor, and its vested interest in securing natural resources from the NSAGs who

control of many of the richest areas. According to Myanmar Investment Commission

statistics reported in August 2013, foreign investments from 32 countries are focused in

four major sectors: energy, oil and gas, mining, and manufacturing.4 A breakdown of

export earnings per sector shows that more than half come from natural resource

extraction. The government is under pressure to protect these development sites for

investors, intensifying tensions with NSAGs and increase local discontent

4 http://www.elevenmyanmar.com/business/3386-myanmar-s-foreign-investment-hits-us-43-billion

http://www.elevenmyanmar.com/business/3386-myanmar-s-foreign-investment-hits-us-43-billion


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Problem 2: Military and crony monopolization of the

economy

As a result of nearly five decades of military rule, all sectors of the economy are dominated

by the military.5 Following the transition from the Burma Socialist Programme Party

(BSPP) in 1988 to military rule under the new SLORC/SPDC regime, all state owned

enterprises were privatised under two large conglomerates: Myanmar Economic

Corporation (MEC) and the Union of Myanmar Economic Holdings, Ltd. (UMEHL).

Together they control nearly all sectors of the economy in Myanmar. Large crony-owned

companies and foreign companies have to work with the military and their conglomerates

in order to conduct business in the country.

5 According to David Steinberg (“The Role of The Military in the Economy”, Burma Economic Watch,

1/2005) “The military‟s involvement in the direct management of economic enterprises may be an outgrowth

of its conception of its own self-perceived role as the essential positive social force and guardian of the state,

as well as its distinct mistrust of civilian politicians and their competence. The Tatmadaw (armed forces)

regard potential foreign domination and insecurity neither simply nor essentially as a matter of protecting

boundaries, but rather that the dangers to the state have generally been internal–whether from minority

disaffection or insurrections or from foreign economic domination. The need to control such activities thus

becomes an element in the national security equation as perceived by state actors. When such an attitude is

complemented by the self-identified need to protect state sovereignty, it becomes a strong rationale for

internal control.”


15

Union of Myanmar Economic Holdings Limited

The Union of Myanmar

Economic Holdings Ltd. was

established by SLORC Order

No.7/90 on February 18,

1990. Later it was registered

on April 27, 1990 under the

Myanmar Companies Act

(Registration No.28/90-91) with an initial capital of 10 billion kyat (*1990 currency

estimates US$1.4 billion). During the period of privatization and transition from a socialist

command economy, many state owned businesses were transferred to the UMEHL. The

conglomerate operates two types of shares: 40 percent are owned by the Ministry of

Defence controlled Directorate of Defence Procurement; also known as Class "A'' shares,

with 60 percent owned by armed forces personnel, armed forces cooperatives, veterans and

veteran associations; also known as Class "B" shares.

The UMEHL operates various types of businesses that include banking, tourism, real

estate, transportation, cement factory, garment factory, plastic factory, palm oil plantation,

shopping centres, metals, etc.

In 2011, the UMEHL had 30 subsidiary companies that include:

1. Bandoola Transportation (Parami Bus transportation)

2. Myawaddy Trading

3. Five Stars Shipping Company

4. Myawaddy Bank

5. Myawaddy Tours & Travel

6. Myawaddy Enterprises Group

7. Pyininbin Industrial Park (Textile)

8. Jade mines (Kachin state)

9. Ruby and sapphire mines (Shan state)

The UMEHL also operates joint ventures with 22 different companies that include crony

owned companies like Htoo Trading Company (owned by U Tay Za), Shwe Than Lwin

Company (owned by U Kyaw Win) and Asia World Company (owned by U Tun Myint

Naing).

Many critics say that the UMEHL has also been involved in lucrative partnerships with

drug lords. With its close affiliation to the Myanmar military, the conglomerate has

exclusive access to secure preferential contracts with foreign firms. Most FDI in the

country is done through joint ventures with UMEHL, for example, the Letpadaung copper

mines.


16

Both the former Sr. Gen. Than Shwe and Vice-Sr. Gen. Maung Aye were members of the

UMEHL‟s advisory board.

According to July 2011 sources, the CEC members of the UMEHL were:

Chairman Maj. Gen. Khin Zaw Oo

Vice Chairman Maj. Gen. Hla Aung Thein

Managing Director Maj. Gen. Win Than

Managing Director Maj. Gen. Zarni Win

Deputy Managing Director Col. Myint Aung

Deputy MD Lt. Col. Than Tun

Deputy MD Col. Win Kyi

CEC (Legal Advisor) U Thet Aung

CEC Col. Sein Georg

CEC Brig. Gen. Soe Htay

CEC Lt. Col. Kyaw Zay Ya

CEC Maj. Maung Maung Mya Moe

CEC Col. Thaung Win

Myanmar Economic Corporation (MEC)

The Myanmar Economic Corporation (MEC) was

established in March 1997 to rival the UMEHL, which

some military heads felt that the UMEHL did not do

enough to support the Ministry of Defence. The MEC is

operated by the office of the quartermaster general of

armed forces with private shares owned by active-duty

military personnel. Like the UMEHL, it is a conglomerate

company that is also controlled by the Myanmar military

but seems to have a stronger commitment to the welfare of the army and its service

personnel.

According to July 2011 sources, the CEC members were:

Chairman Maj. Gen. Htin Aung Kyaw

Managing Director Col. Khin Maung Soe and Brig. Gen Thura Myint Thein

Legal Advisor Col. Soe Tint and Daw Aye Aye Kyi

Deputy Chief engineer Lt. Col. Tun Tun Oo

Managing Department Lt. Col. Than Tun

Trading Department Capt. Myo Oo

The MEC runs 27 companies including 5 steel plants, a bank, a cement factory and a rice

mill. Like the UMEHL, it runs wholly-owned and joint ventures with 101 different

companies, including crony companies and foreign companies such as Daewoo

International Co., Italian-Thai Co. and Kawasaki Plant Systems Ltd.


17

Wholly-owned companies:

1. Innwa Bank

2. Steel factories

3. Than Lyin Oil refinery factory

4. Sugar factories

5. Construction companies

6. Rice mill

7. Dairy factory

8. Mining company

9. Minerals production and trading company

10. Hotel

Crony companies

Prominent business tycoons were able to emerge and share in the military‟s market

dominance during the period of economic privatisation after 1988. These cronies relied on

close ties with military leaders to secure business deals. This in turn benefitted the military,

which lacked the expertise to manage medium to large-scale industrial projects.

Below is a list of several prominent tycoons and cronies that established companies in the

1990s. Most of the companies are conglomerates involved in construction, mining,

logging, agribusiness and banking.6

1. Tay Za (Htoo Trading Co.)

2. Tun Myint Naing (aka Steven Law) (Asia World)

3. Zaw Zaw (Max Myanmar Co.)

4. Pyi Aung and Nay Aung (Aung Yee Phyo and IGE Co. Ltd)

5. Aung Thet Mann (Ayer Shwe Wah Co.)

6. Michael Moe Myint (Myint and Associates Group)

7. Ne Win Tun (Ruby Dragon Jade and Gems Co. Ltd)

8. Khin Shwe (Zaykabar Co.)

9. Htay Myint (Yuzana Co.)

10. Eike Tun (Aike Tun) (Olympic Construction Co. Ltd)

11. Chit Khaing (Eden Group)

12. Aung Ko Win (Kanbawza Bank)

13. Serge Pun (aka Thein Win) (Serge Pun and Associates (Myanmar) Ltd)

14. Kyaw Win (Shwe Than Lwin Co.)

6 http://www.burmapartnership.org/wp-content/uploads/2011/06/The-Regime_s-Cronies-List-June-27_-

2011_-Final.pdf, http://www2.irrawaddy.org/article.php?art_id=14151&page=1

http://www.burmapartnership.org/wp-content/uploads/2011/06/The-Regime_s-Cronies-List-June-27_-2011_-Final.pdf

http://www.burmapartnership.org/wp-content/uploads/2011/06/The-Regime_s-Cronies-List-June-27_-2011_-Final.pdf

http://www2.irrawaddy.org/article.php?art_id=14151&page=1


18

15. Win Aung (Dragon International Ltd)

16. Aung Myat (Mother Trading Co.)

17. Tin Win (Tin Win Tun Co.)

Problem 3: Poor levels of transparency, accountability

and institutional integrity

As all revenues derived from natural resource projects are centralised by the union level

government, grievances are further aggravated by a general lack of transparency about

where the billions of dollars of revenues are going. With weak institutions and low

professional standards, corruption is endemic in Myanmar. Business deals are known to

involve some form of bribery or payoff at all levels, from the administrative clerk to

government officials. It is also well known in ethnic areas that some resource extraction

(e.g. minerals and timber) is done informally and then traded across the border to China

and Thailand. These undocumented deals are personal agreements with the military,

NSAGs and BGF/PMF.

According to global studies on transparency and accountability, Myanmar has failed

appallingly by international standards. Transparency International gave it a score of 15 out

of 100, ranking 172 out of 176 countries in a 2012 survey report.7 Revenue Watch Institute

ranked the country last in a study of transparency and accountability in the oil, gas and

mining sectors. The study examined 58 countries, giving Myanmar a “failing” composite

score of 4 out of 100.8 Bertelsmann Stiftung‟s transformation index, which analyzes and

evaluates the quality of democracy, market economy and political management in 128

transitional countries, gave Myanmar 1.7 out of 10 in their status index; ranking 127, and

1.77 out of 10 in their management index; ranking 126.9

In 2009, Earth Rights International reported that Myanmar‟s military leaders had siphoned

US$ five billion from natural gas earnings from the Yadana Project into offshore accounts

in Singapore since 2000.10

The issue resurfaced on September 10, 2013 when financial

researcher Jelson Garcia of Bank Information Center (BIC) - a Washington-based non-

profit organisation that monitors international financial institutions - reported that the

World Bank did not cancel the debts Myanmar owed as it held US$11 billion in five

foreign bank accounts. Garcia said that in addition to the World Bank, the International

Monetary Fund (IMF) and Asian Development Bank (ADB) also provided him with the

estimates. Some officials (like Finance and Revenue Minister Hla Tun, director of budget

7 http://www.transparency.org/files/content/publication/Annual_Report_2012.pdf, p21

8 http://index.revenuewatch.org/rgi/data-tool ; http://www.revenuewatch.org/countries/asia-

pacific/myanmar/overview 9 http://www.bti-project.de/fileadmin/Inhalte/reports/2012/pdf/BTI%202012%20Myanmar.pdf, status index:

http://www.bti-project.org/index/status-index/, management index http://www.bti-

project.org/index/management-index/ 10

http://www.thenational.ae/news/world/asia-pacific/junta-has-stolen-billions-in-gas-revenue

http://www.transparency.org/files/content/publication/Annual_Report_2012.pdf

http://index.revenuewatch.org/rgi/data-tool

http://www.revenuewatch.org/countries/asia-pacific/myanmar/overview

http://www.revenuewatch.org/countries/asia-pacific/myanmar/overview

http://www.bti-project.de/fileadmin/Inhalte/reports/2012/pdf/BTI%202012%20Myanmar.pdf

http://www.bti-project.org/index/status-index/

http://www.bti-project.org/index/management-index/

http://www.bti-project.org/index/management-index/

http://www.thenational.ae/news/world/asia-pacific/junta-has-stolen-billions-in-gas-revenue


19

department Maung Maung Win and member of Myanmar Investment Commission Daw

Khaing Khaing New), previously admitted that the government held foreign reserves as a

common practice to facilitate importation of goods and services, and management of the

exchange rate. President‟s spokesman Ye Htut however has denied the allegations.11

Problem 4: Centralisation of resource revenue and

management

A critical problem of reaching political settlement is how the Constitution addresses ethnic

demands for self-determination, specifically ownership, management and revenue sharing.

Section 37 of Chapter 1 (Basic Principles of the Union) enshrines centralisation of natural

resource ownership and management, a major source of national revenue and power.

Chapter I Basic Principles of the Union

37. The Union

(a) is the ultimate owner of all lands and all natural resources above and below the

ground, above and beneath the water and in the atmosphere in the Union

(b) shall enact necessary law to supervise extraction and utilization of State owned

natural resources by economic forces

(c) shall permit citizens right of private property, right of inheritance, right of private

initiative and patent in accord with the law

The creation of state and regional level governments in the 2008 Constitution is a

significant step in addressing natural resource management and ownership. Subnational

governments now have partially elected legislatures, their own ministries, judiciary and

financial budget that are essential structures for decentralisation of power, making them

accountable to local populations. In reality, the Constitution is still far from resolving long

held grievances; these new state level structures are largely administered from the center,

facing problems of administrative and financial limitations.

The most obvious limitation is the little power of state and regional governments to control

industries like agriculture, energy, electricity, mining and forestry, which are still managed

on a union level.

Table 3 compares the legislative powers of union level (listed in Schedule one of the 2008

constitution) and state and regional level (listed in Schedule two of the 2008 Constitution),

clearly demonstrating that decisions over key issues are made by the central government,

while state and regional governments are left with control over small-scale projects. The

same problem arises in budgetary powers as states can only collect tax on small-scale

11

http://www.elevenmyanmar.com/national/3398-myanmar-possession-of-11b-in-foreign-bank-accounts-

based-on-information-from-wb-and-adb

http://www.elevenmyanmar.com/national/3398-myanmar-possession-of-11b-in-foreign-bank-accounts-based-on-information-from-wb-and-adb

http://www.elevenmyanmar.com/national/3398-myanmar-possession-of-11b-in-foreign-bank-accounts-based-on-information-from-wb-and-adb


20

items as listed in schedule five of the Constitution, such as woods (with the exception of

teak or other restricted hardwoods), electricity generated from medium- and small-scale

electric power plants not connected to the national power grid.

Table 3: Legislative powers - contentious issues in the Constitution

Schedule one - Union level Schedule two - State/Regional level

4. Economic sector

(a) Economy

(b) Commerce

(c) Co-operatives

(d) Corporations, boards, enterprises,

companies and partnerships

(e) Imports, exports and quality control

thereof

(f) Hotels and lodging houses

(g) Tourism

2. Economic sector

(a) Economic matters undertaken in

the region or state in accordance with

laws enacted by the Union

(b) Commercial matters undertaken in

the region or state in accordance with

law enacted by the union

(c) Co-operative matters undertaken in

the region or state in accord with law

enacted by the Union.

5. Agriculture and livestock breeding sectors

(a) Land administration

(b) Reclamation of vacant, fallow and virgin

lands

(c) Settlements and land records

(e) Dams, embankments and irrigation works

managed by the central government

3. Agriculture and livestock breeding

sectors

(a) Agriculture

(b) Protection against and control of

plants and crop pests and diseases

(c) Systematic use of chemical

fertilizers and systematic production

and use of natural fertilizers

(d) Agricultural loans and savings

(e) Dams, embankments, lakes, drains

and irrigation works having the right

to be managed by the region or state

(f) Fresh water fisheries

(g) Livestock breeding and systematic

herding in accord with the law enacted

by the central government

6. Energy, electricity, mining and forestry

sectors

(a) Petroleum, natural gas, other liquids and

substances declared by union law as

dangerously inflammable

(b) Production and distribution of electricity

of the Union

(c) Minerals, mines, safety of mine workers,

4. Energy, electricity, mining and

forestry sectors

(a) Medium and small scale electric

power production and distribution are

to be managed by the region or state if

not linked with national power grid.

Exception for large scale electric

power production and distribution that


21

and environmental conservation and

restoration

(d) Gems

(e) Pearls

(f) Forestry

(g) Environmental protection and

conservation including wildlife, natural plants

and natural areas

will be managed by the central

government

(b) Salt and salt products

(c) Cutting and polishing of gemstones

within the region or state

(d) Village firewood plantation

(e) Recreation centers, zoological

gardens and botanical gardens

7. Industrial sector

(a) Industries to be undertaken on a union

level

(b) Industrial zones

(c) Basic standardisation and specification for

manufactured products

(d) Science, technology and research

(e) Standardisation of weights and measures

(f) Intellectual property such as copyrights

patents, trademarks and industrial designs

5. Industrial Sector

(a) Industries other than those

managed by the central government

(b) Cottage industry

10. Management sector

(b) Administration of town and village land

(h) Development of border areas

8. Management sector

(a) Development matters

(b) Town and housing development

(c) Honorary certificates and awards

SCHEDULE FIVE Taxes collected by region or states

1. Land revenue 2. Excise revenue. 3. Water tax and embankment tax based on dams

and reservoirs managed by the region or state and tax on use of electricity generated by

such facilities managed by the region or state. 4. Toll fees from using roads and bridges

managed by the region or state. 5. (a) Royalty collected on freshwater fisheries. (b)

Royalty collected on marine fisheries within the permitted range of territorial water. 6.

Taxes collected on vehicles on road transport and vessels on inland waterway transport

in accord with law in a region or a state. 7. Proceeds, rent fees and other profits from

those properties owned by a region or state. 8. Fees, taxes and other revenues collected

on services enterprises by a region or state. 9. Fines imposed by judicial courts in a

region or state, including Taya Hluttaw region or Taya Hluttaw state, and taxes

collected on service provision and other revenues. 10. Interests disbursed by a region or

state. 11. Profits returned from investment of a region or state. 12. Taxes collected on

extraction of the following items from the forests in a region or state: (a) Taxes

collected on all other woods, except teak and other restricted hard woods. (b) Taxes

collected on firewood, charcoal, rattan, bamboo, bird nests, cutch, thanetkha,

turpentine, eaglewood and honey-based products. 13. Registration fees. 14. Taxes on


22

entertainment. 15. Salt tax. 16. Revenue received from the Union Fund Account. 17.

Contributions by development affairs organizations in a region or state. 18. Unclaimed

cash and property. 19. Treasure trove.

State ministries have been granted little autonomy for a variety of reasons. The state level

administration and ministries are still staffed and run by the pre-existent, General

Administration Department (GAD), which falls under the Home Affairs Ministry - a

system created by the former regime in 1988 and controlled by the military. State

departments also have an ambiguous and often-changing relationship with their

corresponding union level ministries. As state department heads are appointed by union

ministers, they are under the direction of the union level minister. Moreover, state and

regional departments do not correspond directly with ministers of the state or regional

government. This causes overlapping responsibilities that further confuse the chain of

command and accountability. Essentially the state minister has no ministry and little to no

authority in running state or regional management bodies. The executive chief minister of

state is selected by the prime minister, which means they are ultimately accountable to the

prime minister, not their assemblies. Other evidence that state structures are still dominated

by the military include the reserved proportion for military personnel in state legislature,

dominance of USDP military-backed political party representatives as state legislators and,

most importantly, as selected chief ministers of the state.

State ministries are also restricted by the little share of the budget they receive (e.g. in the

current FY 2013-14 union budget only about 3.6 percent is transferred to states and

regions12

). Much of the state revenue is again controlled by the GAD that administers the

township level and controls budget allocated by the Home Affairs ministry. The state also

has no financial autonomy as the budget, although approved by the state legislation, still

needs to be submitted to the Union Financial Commission for final approval.13

12

State and Region Governments in Myanmar, The Asia Foundation, September 2013, page 43 13

Most of the information on decentralisation is based on the “State and Region Governments in Myanmar

(Report)” published by the Asia Foundation in September 2013


23

Attempted Solution 1: Institutionalising management of

natural resources and revenues

In all peace negotiations, NSAGs have called for an increase in state power and

constitutional federalism. This would allow for the self determination to “freely determine

their political status and freely pursue their economic, social and cultural development”.14

In short, NSAGs want ownership and management power over natural resources in their

areas, but the current constitution has granted more powers to the union government.

Opposition leader Daw Aung San Suu Kyi also recognises that “the ethnic problem will

not be solved by this present constitution which does not meet the aspirations of the ethnic

nationalities”.15

Both foreign and domestic civil society groups and experts are also calling for

decentralisation of power to address fairer management of resources. According to civil

society groups, constitutional federalism is important for a number of reasons:16

1. Protecting state self-governance

2. Establishment of constitutional state ownership and control over local resources

3. State and region owned resources would increase local benefits

4. Federalism would reduce corruption by union officials

5. Communities affected by development would gain greater representation

The need to bring power to state levels to improve management, and ensure benefits for the

local population has been recognised by top government leaders like lower house speaker

Shwe Mann and President Thein Sein. In particular, the issue is important for spurring

economic development and expediting the peace process. President‟s Office Minister U

Soe Thein said Parliament should approve changes to the Constitution to allow a greater

percentage of revenue sharing. U Soe Thein told the RFA‟s Burmese service that “it is our

dream, the president‟s and ours, to transfer the power to [the ethnic nationalities] to govern

their regions”.17

Minister Soe Thein also said on October 3, 2012 the government wanted

to provide more autonomy to ethnic states, calling on Parliament to approve changes to the

Constitution that allow a greater percentage of revenue sharing from the exploitation of

natural resources.

While amending the Constitution is encouraged by key figures in the government, a

complete rewrite is not welcomed. During the Shan-Kayah conference in March 2013,

14

http://www.dvb.no/analysis/self-determination-and-constitutional-reform-in-burma-myanmar-ethnic-

minorities-constitution/32417 15

Quote from Aung San Suu Kyi‟s speech during a conference in Prague, 17 September 2013.

http://www.reuters.com/article/2013/09/17/us-myanmar-suukyi-idUSBRE98G0ZZ20130917 16

Shwe Gas Movement‟s Presentation “EITI: Challenges in Burma” at BNI‟s Economics of Peace

Conference, 8 Sept 2013 17

http://www.mizzima.com/news/inside-burma/8156-burma-wants-to-share-more-revenue-with-ethnic-

states-minister.html

http://www.dvb.no/analysis/self-determination-and-constitutional-reform-in-burma-myanmar-ethnic-minorities-constitution/32417

http://www.dvb.no/analysis/self-determination-and-constitutional-reform-in-burma-myanmar-ethnic-minorities-constitution/32417

http://www.reuters.com/article/2013/09/17/us-myanmar-suukyi-idUSBRE98G0ZZ20130917

http://www.mizzima.com/news/inside-burma/8156-burma-wants-to-share-more-revenue-with-ethnic-states-minister.html

http://www.mizzima.com/news/inside-burma/8156-burma-wants-to-share-more-revenue-with-ethnic-states-minister.html


24

Shan leaders said they were warned by Aung Min to not raise the issue.18

Many ethnic

leaders and groups, including the UNFC, have called for the Constitution to be rewritten

due to its restrictive nature in making amendments. Currently the UNFC and UNA are

drafting a federal constitution to counter the current one. The UNFC principles will be

based on a second draft federal constitution published in 2008. The second draft included

some input from the ethnic armed groups, civic groups and individuals. The main features

with regard to power sharing include separate constitutions for each member state and full

power of each state‟s legislation to control all affairs in their own state. These will include

tax, large scale energy projects and exploitation of natural resources (see article 104).

As part of the government‟s attempts to tackle power sharing issues, President Thein Sein

has made decentralisation an important part of his overall reform strategy. Minister U Hla

Tun of the President‟s Office is primarily responsible for decentralization. The Framework

for Economic and Social Reform (FESR), which is a ten-point reform strategy drafted at

the Centre for Economic and Social Development (CESD) to support the president‟s policy

approach to a more people centered development strategy, was announced at the third

planning committee meeting on December 28, 2012. It emphasizes development of laws

and regulations surrounding decentralization, and the possibility of adding areas to the

existing list of state and regions‟ responsibilities, stressing the need for a more

“comprehensive” policy on decentralization. The president has expressed hope that this

new administrative system “will reduce public grievances caused by the high handed

actions taken by individual administrators”.19

In August 2013, the president announced public administration reform initiatives to bring

more order to the confused accountabilities among state and region departments, ministers

and Hluttaws. These include increasing more state and region influence over human

resources and further deconcentration of major union ministries. As part of this 30 month

development plan, the structural formation of village and township committees will

oversee implementation on a local level, reviewing and prioritising development projects.

Parliament has also passed a new region or state Hluttaw bill replacing the 2010 State

Peace and Development Council (SPDC) law. The 2013 law introduces potentially

significant changes, including permitting a state or regional Hluttaw office that is not

necessarily GAD controlled, allowing for public attendance at Hluttaw sessions, and

proposing that representatives should have constituency funds and independent

representative offices. The UNDP with its partner organization United Nations Capital

Development Fund (UNCDF) and the World Bank are both in the process of designing and

initiating large development programmes with subnational governance components. They

partner with government, aiming to provide resources to township and community levels

while enhancing local capacities for development planning and implementation. Linkage

of these projects to the roles and capacity of state and region governments will be

18

http://bnionline.net/index.php/news/shan/14995-ethnic-armed-group-leaders-and-government-

representatives-met-in-lashio.html 19

http://www.president-office.gov.mm/en/?q=briefing-room/speeches-and-remarks/2012/12/26/id-1320

http://bnionline.net/index.php/news/shan/14995-ethnic-armed-group-leaders-and-government-representatives-met-in-lashio.html

http://bnionline.net/index.php/news/shan/14995-ethnic-armed-group-leaders-and-government-representatives-met-in-lashio.html




25

important in ensuring they contribute to the broader evolution of sub-national governance

structures.

On the legislative front, the ruling majority USDP established a parliamentary committee

on July 25, 2013 to review the country‟s Constitution and determine which changes will be

in line with the pace of political reforms. The 2008 Constitution Joint Review Committee

is chaired by Deputy Speaker of Lower House U Nanda Kyaw Swa and the vice chair is

the deputy speaker for the Upper House U Mya Nyein. It includes 109 MPs: 52 members

from the ruling party, 25 military MPs, 7 from NLD and 25 from other winning parties and

individuals. They have until December 31, 2013 to produce their recommendations. The

committee held its first meeting on August 23, 2013, but it is not known what issues are

being discussed.20

Aside from the commission, parliament also held a debate on

“Decentralisation and Restructuring Administration” in the upper house on August 6,

2013.21

Writer Kyaw Win presented on “Federalism and Practise in Myanmar” and another

writer Saw Myint Maung gave a presentation on “Decentralization and Restructuring

Administration”.22

To balance the Constitution review committee, the NLD and UNA parties have formed

their own review committee intending to publish a report in November 2013. They hold

weekly meetings every Saturday, but have not publicised the specific issues they are

tackling.

Proposals for power sharing have been vague with no specific suggestion on which

powers, or what percentage of the budget should be allocated to whom. Zaw Aye Maung,

the Yangon region Ethnic Rakhine Affairs minister, proposed a „Myanmar Natural

Resources Allocation Bill‟ on August 18, 2013 to grant ethnic people proceeds from

natural resources extracted in collaboration with foreign and domestic companies. At time

of writing, the bill is under consideration by the Rakhine Nationalities Development Party

(RNDP), Arakan League for Democracy (ALD) and legal experts, and will be one of the

issues presented to Parliament speaker Thura Shwe Mann on September 29, 2013.23

Sai

Eaik Pau, Minister of Shan State Forest and Mining, has also demanded for Parliament to

increase state budget sharing to 50 percent from 7 percent of the national budget during a

visit by parliamentary chair Thura Shwe Mann in Taunggyi on September 2, 2013.

The WGEC‟s framework for peace talks (latest version on April 8, 2013) vaguely

mentions the need to discuss state versus union level governmental powers and state

constitutions in its “dialogue issues” topics on “1. Constitutional reforms” and “3.

20

http://www.myawady.net.mm/allnews/local/item/23331-2013-08-24-09-28-04 21

Decentralization and Restructuring Administration Debate held, New Light of Myanmar, 2 Aug 2013. p8

http://www.burmalibrary.org/docs15/NLM-2013-08-02-red.pdf 22

http://www.rfa.org/burmese/news/writer-kyawwin-explain-federalism-paper-08062013124832.html 23

http://www.mizzima.com/business/natural-resources/9877-minister-seeks-support-to-table-natural-

resources-allocation-bill-in-the-parliament， http://www.mizzima.com/news-91481/prisoner-watch/10149-

speaker-to-meet-with-rakhine-organizations ，http://www.mmtimes.com/index.php/national-news/7941-

rakhine-push-for-fair-share-of-resources.html

http://www.myawady.net.mm/allnews/local/item/23331-2013-08-24-09-28-04

http://www.burmalibrary.org/docs15/NLM-2013-08-02-red.pdf

http://www.rfa.org/burmese/news/writer-kyawwin-explain-federalism-paper-08062013124832.html

http://www.mizzima.com/business/natural-resources/9877-minister-seeks-support-to-table-natural-resources-allocation-bill-in-the-parliament，

http://www.mizzima.com/business/natural-resources/9877-minister-seeks-support-to-table-natural-resources-allocation-bill-in-the-parliament，

http://www.mizzima.com/news-91481/prisoner-watch/10149-speaker-to-meet-with-rakhine-organizations

http://www.mizzima.com/news-91481/prisoner-watch/10149-speaker-to-meet-with-rakhine-organizations

http://www.mmtimes.com/index.php/national-news/7941-rakhine-push-for-fair-share-of-resources.html

http://www.mmtimes.com/index.php/national-news/7941-rakhine-push-for-fair-share-of-resources.html


26

Economical questions” proposed for peace talks between NSAGs and the government.

However these again do not give concrete solutions, leaving the issue open for discussion

and agreement between the two sides.

Attempted Solution 2: Economics behind the

government’s DDR plan

Business concessions are an important part of the government's Disarmament,

Demobilisation and Reintegration (DDR) scheme to reintegrate armed groups back into the

legal fold. It is also a key demand in many peace agreements by NSAGs to improve the

economy of their regions. These also allow sustainable income for NSAGs to maintain

their power and support the livelihoods of their soldiers as well as their families.

This importance for economic arrangements is explained well in the WGEC framework‟s

inclusion of transitional arrangement: “to enable EAGs to operate during the transition

period of the peace process in order to enable them to take on a strong role in a future

Union of Burma/Myanmar”. Under section “3. Power sharing”, it states “(a) EAGs are

granted access to resources, either through (i)Tax collection, (ii) Engaging in business

activity, (iii) Receiving aid from the Government or international donors, or (iv) Revenue

sharing from mega-projects in the territory of EAGs”.


27

BGF/PMF According to the government‟s DDR program, NSAGs should transform into political

parties to compete in elections, while members under 50 years will serve in BGF/PMFs

under command of the government military. In addition, they are encouraged to operate

legal businesses and register as companies.

The results so far have been diverse. While some have been successful in setting up

companies and even being elected as MPs in their areas, others have become heavily

involved in illegal activities such as “collecting taxes” and the drug trade in order to

sustain themselves. This explains why there has been an increase in drug production

despite the ceasefires. However as the government does not want to disrupt these fragile

agreements, they often turn a blind eye to illegal activities by BGF/PMFs. The most

notorious case of a PMF becoming a criminal organisation is Naw Kham and his

Hawngleuk Militia based in the Golden Triangle of eastern Shan state. This example

presents a strong warning about the failings of the BGF and PMF plan.

Business demands and concessions in post-2011 peace

negotiations

Most NSAGs have asked for specific business concessions during peace negotiations with

the government as a way to participate in regional development. It is also a form of

political settlement as it allows NSAGs a share in the economy and access to natural

resources in their respective areas. The revenues they earn also allow them to legally

maintain the activities of their group and part of the demilitarisation and reintegration

process.

Below is a list of business concessions demanded and achieved to date (September 2013).

This has had mixed results with some being successful, while others have not. This is due

to management problems (as many do not have business skills), or in other cases like the

RCSS, the military has blocked their activities despite being allowed to register and

operate by the government peace team. Table 4: NSAG businesses

NSAG Registered Company Details

CNF Khonumhtung (2012) Construction, logging,

communication, trading, tourism

Concession to build a 15 mile road

from Htantalan Granted permission to

cut 1000 tons of teak and 1000 tons of

hardwood

DKBA Unregistered Rubber plantation, sandalwood


28

plantation, mining and teak wood

logging

Karen BGFs Unregistered (running

business as a BGF)

agribusiness, mining, trading,

manufacturing, tourism

(According to BGF leader Col. Saw

Chit Thu, more than 50 percent of net

benefits have been used in local

development, healthcare and education

for member's family).

KIO Buga (1994) Distribution of electricity to

Myitkyina, Mining (jade), trading,

agribusiness

(all activities except electricity

distribution have stopped after the

ceasefire broke down in 2011)

KNPP 1. Kayah Htarnay Co.

(2012)

2. Tamaw Hta (2012)

Kayah Htarnay Co. 'Lead' exploration

in Kayah state, Tamaw Hta will run as

an import and export company

focusing on timber (teak wood).

KNU 1. MOE KO SAN

Travel & Tours Co.

Ltd, Trading Company

Ltd. (run by Brigade 7)

2. Unregistered

businesses

Logging, mining, agribusiness,

tourism, transportation

KNU/KNLA Peace

Council (KPC)

Unregistered Rubber plantation, transportation and

border trade

Demanded exploration and trade

licences for timber and mineral

extraction and tourism

NDAA Shwe Lin Star Tourism

(1989)

Mining, agribusiness, logging, trading,

tourism, hotel, casino

Granted 1000 tons of timber (out of

10,000 tons it had requested). It is also

permitted to construct hydropower

plants and operate mineral mines.

NMSP 1. Ramanya

International (1995)

2. Hansawati Company

Construction, agribusiness and trading


29

(1995)

3.Ramanya United

(2012)

PNLO Pending registration Permitted to conduct logging, mining

and minerals, trading, cement,

construction, as well as run hotels and

warehouses

RCSS Shan Taungdan Cherry

(2012)

Permitted mining, road construction,

logging, agriculture, power

distribution, tourism, trading,

transportation and agribusiness

Proposed to establish industrial zone

in southern Shan state

SSPP Unregistered SSPP leaders are known to have ruby

mine and trading concessions

following the 1989 ceasefire.

UWSA Thawda Win

(registered in 2012)

changed the name from

Hong Pang Group

(1988)

1. Tet Kham Co. Ltd

2. Myanmar Dagaung

Co. Ltd

3. Mong Mau Co. Ltd

Multiple businesses: construction,

agriculture, gems and minerals,

logging, petroleum, electronics,

telecommunications, factories, bank,

distilleries, department stores, airline,

hotels and brewery


30

Role of Business Peace brokers

The involvement of Dawei Princess Co. Ltd in

brokering and providing logistical and financial

contributions during the early stages of KNU-

Government peace talks demonstrates the role of

businesses in bridging NSAGs with the

government.24

Dawei Princess also paid for the

establishment and operating costs of the KNU liaison office in Dawei town, but after the

establishment of the Myanmar Peace Center and Peace Donor Group the company is no

longer involved in the peace process. Dawei Princess Co. Ltd is run by retired military

officer U Ngwe Soe, a stakeholder in the Dawei deep-sea port and logging businesses that

cross through KNU-controlled territory. This has naturally raised suspicions about the

government‟s outsourcing of the ceasefire process to commercial entities like Dawei

Princess Co. Ltd.

According to the U Ngwe Soe they were involved in the peace process for purely

philanthropic reasons in the pursuit of peace.25

As a former military officer who fought

against the KNU in 1982, U Ngwe Soe claims he has a personal desire for the conflict and

suffering to end. More importantly, his close relations with KNU officials and the

government positioned him well to broker the peace talks between the two sides. He cites

certain initiatives by high ranking officers of KNLA Brigade (4) that motivated the Dawei

Princess Company‟s mediation of peace talks with the government. KNU‟s Naw Zipporah

Sein also confirmed that the Dawei Princess Company made the first contact to the KNU

and initiated the state level meeting with the government team led by U Aung Min.26

Similarly, the Peace Creation Group (PCG) that has been

instrumental in mediating between the KIA and government peace

team is made up of high profile Kachin businessmen. PCG also

claim that their involvement in the peace process has been purely

philanthropic and they do not aim to gain advantages in the way of

business concessions. Like Dawei Princess Co. Ltd, the PCG were

able to leverage their good relations with both the KIO and the

government to broker talks between the two sides.

Towards the beginning of the peace talks KNU Vice-chairperson

Padoh Naw Zipporah Sein seemed to express more concern about

the role of government advisors from the so called civil society

24

The sub-contractors on the project include the Dawei Development Co., a subsidiary of Max Myanmar

owned by Zaw Zaw; Dawei Princess Co., owned by Khin Zaw Min, the brother of former Triangle Region

Command Commander Khin Zaw Oo; Myanmar Original Group; Kanaung Asia; Yuzana Co., owned by

Tanintharyi Region MP Htay Myint; and San Thit Co. http://www.mizzima.com/news/inside-burma/6379-

coal-power-plant-in-dawei-cancelled.html 25

http://www.daweiprincess.biz.mm/index.php?option=com_content&view=article&id=12&Itemid=117 26

http://karennews.org/2012/05/knu-questions-role-of-govts-business-linked-peace-talk-advisors.html/

http://www.mizzima.com/news/inside-burma/6379-coal-power-plant-in-dawei-cancelled.html


http://www.daweiprincess.biz.mm/index.php?option=com_content&view=article&id=12&Itemid=117



31

group Myanmar Egress that is actually made up of businessmen holding key positions in

the Myanmar Peace Center.27

Myanmar Egress‟s President Tin Maung Than is the vice

president of the Myanmar Fisheries Federation, and Vice President Hla Maung Shwe is

also vice president of the Union of Myanmar Federation of Chamber of Commerce &

Industry (UMFCCI). Naw Zipporah Sein told the Karen Information Center that they

“don‟t know exactly what their roles are...Myanmar Egress acts as an advisor to the

government, but the government has not yet officially explained its role to the KNU”.

Politics of Foreign aid in development

Many civil society groups are also skeptical about the business interests of foreign

assistance in the peace process, namely the two main donors funding the peace process

Norway and Japan.28

Norway is spearheading the Peace Donor Support group

(members include Australia, the United Kingdom, the

European Union, the United Nations, and the World Bank).

They are also the facilitating body of the Myanmar Peace

Support initiative (MPSI). In June 2012, the group offered

US$100 million for peace building. While acting as a peace

broker, Norway has also shown strong economic interests in

Myanmar. The Norwegian Telecommunications Company

Telenor won one of two mobile operating licenses from the

government of Myanmar. Norway's energy company Statoil is

considering exploring Myanmar's oil and gas resources. The

Norwegian Prime Minister Stoltenberg explicitly said during his trip to Myanmar on

November 4, 2012 that “Norway wishes to boost trade and commercial ties with

Myanmar…in energy, hydropower, oil and gas, fishery and communication”.

Japan channels specific support for the peace process through the

Nippon Foundation, which has already provided US$3 million to

the UNFC. On the economic front, Japan will invest US$ 12.6

billion to build Thilawa SEZ near Yangon (Mitsubishi,

Marubeni, Sumitomo have a 49 percent share). The Japanese

government has strong interests in infrastructure projects, mining

and other general opportunities in the emerging markets. The

prime minister and deputy prime minister‟s visits to Myanmar in

May 2013 and December 2012 saw the cancellation of

Myanmar‟s 500 billion yen (US$4.9 billion) debt and the addition of hundreds of billions

of yen in Japan's Official Development Assistance to Myanmar. Many political analysts

27

http://karennews.org/2012/05/knu-questions-role-of-govts-business-linked-peace-talk-advisors.html/ 28

Based on concerns expressed by the Ethnic Community Development Forum‟s general secretary Sai Khur

Hseng in his presentation at BNI‟s Economics and Peace seminar on September 8, 2013.



32

suspect that Japan has strong geopolitical interests in Myanmar to counter China‟s

dominance in Southeast Asia.

Attempted Solution 3: Improving governance

Improving Myanmar‟s weak and inefficient governance systems is a necessary

precondition to support rapid reforms and tackle corruption. Administration training has

been held for government officials and civil servants by both local experts and foreign

governments such as Japan and China. Initiatives to enhance local capacities for improved

decentralisation and general governance are also covered under development aid programs

by foreign donors (e.g. Australia, IMF, UNDP and World Bank).

Myanmar's lower house of Parliament formed a 15-member Committee for Rule of Law

and Peace and Stability on August 7, 2012. Parliamentarian Daw Aung San Suu Kyi serves

as the chairperson. The committee assists and coordinates with MPs, government judicial

bodies and other government staff and the media with the intention of ensuring that rule of

law is followed. If necessary the committee can take action by informing the house

speaker. The committee also monitors legal matters regarding the revoking, amendment

and promulgation of laws and by-laws. During its first meeting on August 9, 2012

discussions were aimed at making sure the peace-making processes adhere to the law. By

October 2012, the committee had already received more than 1,700 complaint letters,

mostly related to land disputes and other legal and judicial issues. The committee was said

to have sought cooperation from relevant ministries for assistance in addressing the

grievances. A seven-page report that was submitted by the committee in August 2013

called independence between the state and the judiciary an important step for establishing

effective rule of law. The report also highlighted weaknesses in the legal system and the

general ineffectiveness of the police force in solving crimes. The report suggested that

Parliament form an independent anti-corruption team to aid in the elimination of bribery

and corruption in Myanmar.

An anti-corruption action committee created by presidential decree on January 8, 2013 is

seen as an important first step by some in tackling endemic corruption.29

The committee is

chaired by Vice President Dr. Sai Mauk Kham, with U Hla Tun, director general of the

President‟s Office, serving as secretary. Other members include Minister for Home Affairs

Lt. Gen. Ko Ko, President‟s Office Minister U Thein Nyunt, President‟s Office Minister U

Soe Maung, President‟s Office Minister U Soe Thein, President‟s Office Minister U Tin

Naing Thein, Attorney-General Dr Tun Shin and U Than Kyaw, an adviser to the president

on legal affairs.

The specific functions and scope of operations of the committee are still unclear. At a

meeting on July 1, 2013, Sai Mauk Kham issued a statement about the key issues to be

29

http://www.mmtimes.com/index.php/national-news/3773-anti-corruption-committee-formed.html

http://www.mmtimes.com/index.php/national-news/3773-anti-corruption-committee-formed.html


33

addressed, suggesting actions to be taken.30

Many have expressed concern that there are no

non-governmental representatives on the committee, which may explain why the

Committee for Rule of Law and Peace and Stability called for an independent anti-

corruption team.

The anti-corruption bill passed by Parliament on August 7, 2013 aims to achieve good

governance, rule of law and transparency in the country that will meet international

standards.31

The bill was part of an effort to ratify the UN Convention against Corruption

and was drafted with assistance from UNODC and UNDP.32

The bill requires all officials

in the executive, judicial and legislative branches of government to declare their assets.

Those found guilty will be charged by the Anti-corruption Commission formed by the

Anti-corruption Action Committee. The Anti-corruption Commission is also required to

declare their assets, but the president opposed this provision. According to chapter (3)

section (d), the anti-corruption commission has the authority to investigate unusual levels

of wealth and any corruption cases. In section (e), the commission must report findings to

the president and upper and lower house speakers.

The Public Service Performance Appraisal (PSPA) was established on February 22, 2013

under government order number 17/2013. Its primary objective is to increase efficiency-

related services to establish a people-centered good governance system with better

administration. The committee is led by President‟s Office Minister U Tin Naing Thein,

and includes deputy ministers from Home Affairs, a political advisor to the President U Ko

Ko Hlaing, economic, and social advisors Dr. Aung Tun Thet, Dr. Zaw Oo and U Tin

Maung Than from MDRI. The team will cooperate with ministries to identify redundant

and inefficient bureaucratic procedures, as well as analyse their operations and public

relations, collect internal and public opinions and consult domestic and foreign experts.

Their findings and suggested improvements will be presented to the president.

Attempted Solution 4: Transparency and the Extractive

Industries Transparency Initiative (EITI) candidature

Increasing partnership with civil society and recognition of local voices has been

acknowledged as vital to effectively increasing transparency. The government also realises

the need to ensure trust from locals in order to ensure healthy and sustainable growth.

30

http://www.mizzima.com/news-91481/prisoner-watch/9628-anti-corruption-committee-meets-in-

naypyitaw 31

http://www.myanmargeneva.org/uselink/uselink2.htm 32

http://www.unodc.org/southeastasiaandpacific/en/myanmar/2012/10/uncac/story.html

http://www.mizzima.com/news-91481/prisoner-watch/9628-anti-corruption-committee-meets-in-naypyitaw

http://www.mizzima.com/news-91481/prisoner-watch/9628-anti-corruption-committee-meets-in-naypyitaw

http://www.myanmargeneva.org/uselink/uselink2.htm

http://www.unodc.org/southeastasiaandpacific/en/myanmar/2012/10/uncac/story.html


34

One major step in improving transparency is the government‟s plan to join the Extractive

Industries Transparency Initiative (EITI) by the end of 2013. This will provide an

important framework and standards to improve reporting practices in extractive industries.

Supporters of the bid say compliance with the EITI will improve the country‟s investment

climate, sending a strong signal to potential investors and international financial

institutions that the government is committed to achieving greater transparency. It also

helps to ensure good practices that will assist in solving conflicts over resources, reducing

the communication gap between all stakeholders and attracting large investors.

Nine extractive industries have already been proposed for Myanmar‟s EITI candidature:

1. Oil and gas exploration, development, processing, domestic use and export

2. Oil and gas transit and transfer pipelines

3. Hard minerals and metals in the mining sector

4. Industrial minerals in the mining sector

5. Gemstones and semi-precious stones sector

6. Timber and forest products sector, including forest plantations

7. Hydroelectric power

8. Fisheries

9. Non-timber forest products and wildlife

If all goes as planned, a multi-stakeholder group will be formed by the end of October and

Myanmar will submit its first annual EITI report in 2015. The EITI rules require that any

country applying for EITI Candidate status must meet the following five requirements.

NO Candidature requirements Status

1 The government must issue an

unequivocal public statement of its

intention to implement EITI.

Completed - 14 December 2012, order

no. 99/2012 (publically announced on

the front page of the New Light of

Myanmar newspaper

2 The government must commit to

working with civil society and the

private sector to implement EITI.

Completed

3 The government must appoint a senior

individual to lead an implementation

of EITI.

Completed - 14 December 2012. The

high level committee is headed by

Presidential office minister U Soe Thein.

He leads a team of four other ministers:

Minister of Environmental Protection,

Minister of Energy, Minister of Mines

and Minister of Finance (secretary).


35

4 The government must establish a

multi-stakeholder group to oversee

implementation of EITI.

In Progress - a technical advisory group

based at the Myanmar Development

Resource Institute (MDRI)‟s Center for

Social and Economic Development will

help establish and administer the multi-

stakeholder group.33

They are supported

by the World Bank and Australian

government that manages a multi-donor

trust fund for Myanmar‟s EITI

candidature. They have also created a

country technical advisor post.

5 The multi-stakeholder group, in

consultation with key EITI

stakeholders, must agree on and

publish a fully-costed work plan,

containing measurable targets, a time

frame for implementation and an

assessment of capacity constraints.

Pending

The Myanmar Development Resource Institute‟s Center for Economic and Social

Development (MDRI-CESD) has been tasked to coordinate the establishment of the MSG.

In May 2013, MDRI led a team of 23 representatives that attended the EITI Global

Conference in Sydney, Australia. These included civil society groups such as 88

Generation Students Group, Mon Social Development Network, Myanmar Geologists

Association, Myanmar Green Network, Paung Ku and Shwe Gas Movement.

Thein Sein‟s presidential notification stated that preparations for candidature should be

complete by the end of 2013; although the deputy team leader of Myanmar EITI

cooperation office (MEITI) Min Zar Ni Lin said that the country will most likely not be

compliant until 2016 or 2017. Min Zar Ni Lin claims that the main difficulty is the lack of

legal status for most civil society groups.34

Moreover, problems of mistrust between civil

society groups and the government remain a hurdle in forming the multi stakeholder group.

EITI communications officer in Norway, Helene Johansen, also told the Irrawaddy that

limited public access to information about the sector was another major challenge facing

EITI implementers. Civil society groups like Shwe Gas Movement are also skeptical about

the government‟s ambitious plans to complete its candidature by the end of the year for the

same reason, and emphasised the Myanmar Oil & Gas Enterprise (MOGE) is an important

source for the military‟s finances, which may suggest an unwillingness to expose industry

accounts.35

33

http://www.mmtimes.com/index.php/national-news/7798-myanmar-eiti-application-on-track-for-

december.html 34

http://www.irrawaddy.org/archives/42094 35


http://www.mmtimes.com/index.php/national-news/7798-myanmar-eiti-application-on-track-for-december.html

http://www.mmtimes.com/index.php/national-news/7798-myanmar-eiti-application-on-track-for-december.html




36

Economic Grievance 3: Land confiscation and rights

Problem background

A major source of resentment against the government and its reforms is large scale land

confiscation for development projects - a result of the previous SLORC/SPDC regime‟s

economic reforms that focused on rapid economic growth.36

The government used the

1963 Land Acquisition Act, which nationalized land ownership across the country, to

justify land grabs beginning in the 1990s. In addition to business and development

projects, the military also confiscated large amounts of land to build military sites, as well

as selling land for personal profit. Because 70 percent of Myanmar‟s population depends

on agriculture for their livelihoods, land confiscation and tenure insecurity are a major

cause of poverty and food scarcity. While there is no data to prove exactly how much land

has been confiscated from 1989 to 2010, TNI estimates over two million acres. To date,

nearly 300,000 acres of land have been identified in formal complaint letters as illegally

confiscated, and are currently being investigated.37

Despite new land reform laws passed in

2012, reports of arbitrary land confiscation continue in all parts of the country.38

The commercialisation of land under the new land laws and foreign investment laws in

2012 has created a new round of large scale land grabbing. While this was meant to be part

of privatisation reforms for export led and agro-industrial growth with the aim of creating

jobs and overall development, it in fact favours big businesses over small landowners and

migrant farmers. Moreover, in cases of leasing land to foreign investors, this has not

always led to job creation as many bring in their own labourers (especially Chinese and

Thai companies). The new land laws also create problems for many farmers, especially

those in remote and conflict/post-conflict areas that do not own formally recognised land

titles despite having lived off the land for years. For many ethnic populations there is no

legal recognition of customary or collective land ownership systems of land use, especially

societies that practice shifting cultivation. Nor is there any legal right of return for

hundreds of thousands displaced by decades of conflict. The new land laws classify large

areas as “virgin” or “vacant” land, and former inhabitants are now considered “squatters”.

Land confiscation for development projects has led to frequent protests and created a new

wave of refugees and internally displaced people. In other cases, former inhabitants are

now being forced to rent their land from the military, or work as labourers for large

agribusiness plantations that have bought up their land. One example of how the land grab

trend unfolds is the a crop substitution program that promotes Chinese companies

36

“The Land Core group‟s Shwe Thein, a 57-year-old former civil servant in the Forestry Ministry, notes

that when the government began opening the country up to the world economy in the early 1990s, the priority

was too focused on quick economic growth, and not on food security, giving away millions of acres of land

for large scale agriculture between 1991-2012.” http://www.bangkokpost.com/print/366469/ 37

“Access Denied - Land Rights and Ethnic Conflict in Burma”, Transnational Institute, Burma Policy

Briefing Nr 11, May 2013 38

http://www.irrawaddy.org/archives/43930 for Mon state.

http://www.bangkokpost.com/print/366469/


37

(subsidised by the Chinese government) to establish mono-plantations, primarily growing

rubber in areas previously used for poppy production. The Chinese companies, after

procuring the land, then hire the former inhabitants of the land as workers.39

Table 5: Important new laws and committees related to land grabbing

Date Law/Bill Enforcing Body Mandate

Novemb

er 2012

Foreign

Investment

Law

Myanmar

Investment

Commission &

Union Level

Govt.

Allows 100 percent foreign ownership

with restrictions that the MIC

administers and approves. These

restrictions include investments in

certain sectors such as agriculture,

livestock breeding and fisheries.

Restrictions also protect against

investments that are detrimental to

ethnic cultures or customs, public health,

natural resources, environment and

biodiversity.

Pyidaungsu (Union) government also

has a role in determining whether

investment projects can be conducted in

ethnic nationalities areas. It can waive

the restriction that requires Foreign

investment projects to be built within ten

miles of international borders, except in

SEZs, if the project is deemed beneficial

to citizens, especially in ethnic

nationalities areas.

March

2012

Vacant,

Fallow and

Virgin

Lands

Managemen

t Law

Central

Committee for the

Management of

Vacant, Fallow

and Virgin Lands,

(chaired by the

Minister of

Agriculture and

Irrigation)

Stipulates a maximum of 30 year leases

for agribusinesses and can extend a

maximum 30 year lease if they get

permission from the central government

provided the land in question is in less

developed areas of the country that lack

communication, and that the project

promotes Myanmar‟s overall economic

development.

31 Aug

2012

Farm Land

Bill

Central farm land

management

committee

(chaired by

According to law, if a certain ministry or

government‟s department needs to use a

plot of land to implement projects of the

country, the ministry or department must

39

“Financing Dispossession - China‟s Opium Substitution Programme in Northern Burma”, Transnational

Institute, February 2012


38

Minister of

Agriculture and

Irrigation)

inform the committee. If a plot of land is

confiscated for public benefits or for the

nation, the committee must help the

landowner to get compensation without

delay. If the land plot is sold out or hired

to a foreign company without the

knowledge of central government, the

farmland must be confiscated.

Jan 2011 SEZ law

(issued by

former

regime

SPDC)

Myanmar

Investment

commission

Provides several incentives for foreign

investors, including up to 75 years

(30+30+15 year) land use rights for

large-scale industry.

Attempted Solutions: Addressing land confiscation

within existing Constitution

Protests against land confiscation or unfair compensation are increasingly frequent

following new liberal reforms that espouse to being more tolerant of public

demonstrations. Several political parties have raised the issue of land confiscation and land

returns in Parliament e.g. NDF and NUP. The 88 Generation Student Group‟s farmers

committee held a two day conference related to land grabbing. Others like PDP (Peace

Diversity Party), SNDP and NLD are both campaigning and working with farmers to

change the 2012 land laws.

CBOs have also been very important in reporting and advocating on the issue. Landcore

Group, a coalition of non-government organisations working on agriculture-related issues,

launched a plan on June 27, 2012 aimed at protecting the land use rights of the country‟s

small hold farmers. The group intends to develop a framework to guide all agencies and

actors seeking to promote pro-poor land reform.40

Some policy advocates are also trying to

persuade the government to adopt voluntary Food and Agriculture Organisation (FAO)

guidelines on responsible governance on tenure.41

Land rights activist Han Shi Win has pointed out that although Article 31 of the Farmland

Law states that the military should return unused farmlands and compensate for seized

land. He also said the Central Land Management Committee, chaired by Minister for

Agriculture and Irrigation Myint Hlaing, has done little to properly implement the law in

40

http://www.mmtimes.com/2012/news/633/news63304.html 41

http://www.fao.org/nr/tenure/voluntary-guidelines/en/

http://www.mmtimes.com/2012/news/633/news63304.html

http://www.fao.org/nr/tenure/voluntary-guidelines/en/


39

land seizure cases. The land grabbing issue remains sensitive as activists continue to be

arrested for dissent.

Mass discontent resulting from land confiscation has been recognised by government

leaders as a serious threat to reforms and a critique of their legitimacy. In response, a bill

was passed in July 2012 to form a parliamentary committee “Farmlands and Other Land

Acquisition Inquiry Commission” to handle complaints. They produced a report on March

1, 2013 that stated they had received 565 complaints between late July 2011 to January 24,

2013 alleging that the military had forcibly and unlawfully confiscated 247,077 acres

(almost 100,000 hectares) of land since the former regime came to power in 1988.42

The

commission recommended that undeveloped lands be returned to their owners or handed

over to the state, while affected farmers should receive adequate compensation for land

that has been developed

An important finding of the Farmlands and Other Land Acquisition Inquiry Commission‟s

report is that farmers are not satisfied with the MPs‟ efforts to address land grab cases and

are losing trust in the reform process.43

This was echoed by Union Parliament speaker

Shwe Mann‟s message to President Thein Sein during a parliamentary session on August

29, 2013 urging the government to return seized land without hesitation and to maintain

the people‟s trust in democratic reform. On August 23, 2013, presidential office Minister U

Soe Thein also announced to the media that seized farmlands will be returned to their

rightful owners in October upon production of ownership certificate.44

On August 18, 2013

a Union assembly resolution required MPs to report their efforts to resolve land issues to

Parliament every two months. Complaints will be received on a union level but passed

over to regional and state governments to settle. Speaker of the lower house Thura Shwe

Mann urged governing bodies to abide by the proposals urged by Parliament in accord

with Section 228 (A) of the Constitution.

Table 6: Investigating committees and draft bills designed to tackle land confiscation

July 2012 Farmland

Bill

Farmlands and

Other Land

Acquisition

Inquiry

Commission

(chaired by

agriculture and

irrigation

Sixty members working with groups from

each division and state that handle

complaints and produce policy

recommendations.

42

http://www.irrawaddy.org/archives/28506 and http://www.mmtimes.com/index.php/national-news/6195-

most-acquisitions-broke-land-laws-says-commission.html 43

http://elevenmyanmar.com/politics/3246-parliament-speaker-calls-for-quick-return-of-seized-land 44

http://www.mizzima.com/news-91481/prisoner-watch/9923-seized-lands-to-be-returned


http://www.mmtimes.com/index.php/national-news/6195-most-acquisitions-broke-land-laws-says-commission.html

http://www.mmtimes.com/index.php/national-news/6195-most-acquisitions-broke-land-laws-says-commission.html

http://elevenmyanmar.com/politics/3246-parliament-speaker-calls-for-quick-return-of-seized-land


40

minister)

June

2012

Presidential

decree

Land

Allocation and

Utilization

Scrutiny

Committee,

headed by the

environmental

conservation

and forestry

minister

A thirteen-member committee chaired by

the minister for environmental

conservation and forestry that also

includes the deputy ministers for home

affairs, border affairs, agriculture and

irrigation and national planning. The

committee has been tasked with preparing

a land use policy in collaboration with

local and international experts. It will also

examine existing laws, rules and

regulations, recommend and prepare

revisions, and conduct a review of the

land revenue system. The committee is

also meant to advise the president on land

use policy and land laws, and was partly

created to offset the MOAI's monopoly of

power over the land laws and land

allocation.45

June

2013

Farmer‟s

Interest

Promotion

Act/Bill

(draft)

Parliamentary

committee

Draft law to support farmers was released

on June 30 2013 for public feedback. The

88 Generation and Open Society criticised

the draft because it lacks provisions to

give farmers land ownership rights and

protection from land-grabbing, while

concentrating on loans, industrial farming,

market and pricing that serve the interests

of bankers, industrialists and merchants.46

The state-run newspaper „The Mirror‟ reported on August 24, 2013 that out of 655

complaint letters received by Parliament on farmlands seized by the armed forces, Defense

Minister Lt. Gen. Wei Lwin verified and analysed 601 of the complaints. The Defense

minister decided to relinquish 37,546 acres of seized farmlands and return them to

farmers.47

Sen. Gen. Min Aung Hlaing, commander-in-chief of the defence service,

instructed the military to return unused farmlands that are located outside military bases.

Those who have submitted rent for military welfare property can renegotiate a share of the

profits gained from the land as a joint venture. He claimed the military has been

investigating land confiscation cases even before the farmland investigation commission

45

TNI report, Nr 11, May 2013 46

http://elevenmyanmar.com/national/2685-88-group-slams-bill-for-neglecting-farmers-interests, draft law

can be found in the June 30, 2013 edition of the New Light of Myanmar. 47


http://elevenmyanmar.com/national/2685-88-group-slams-bill-for-neglecting-farmers-interests



41

sent them the complaint letters.48

In October 2013, the Myanmar army reportedly started

returning about 10,000 acres out of 37,000 acres seized in Rakhine state by previous

regimes to farmers through the state level government.49

Some cronies are also voluntarily compensating seized land. U Zaw Zaw of the Max

Myanmar Company paid 13 local landowners 728.5 million kyats (US$838,400) for the

seizure of 106 acres of farmlands in Ngwe Hsaung sub-township in Ayeyawady region.50

Zaw Zaw also announced in June 2013 that he will return more than 50 acres of paddy

fields confiscated by the Max Myanmar Group for shrimping to farmers in southwest

Myanmar.51

According to an earlier ruling by the Farmlands and Other Land Acquisition

Inquiry Commission, local farmers were set to receive approximately 2,000 acres

confiscated by the Aya Shwe Wah Co., but residents in the area claim divisional officials

have yet to return their property.52

U Khin Shwe, who owns Zaykabar Company and is

now a lower house MP, is facing lawsuits by Mon farmers that want compensation and

lands returned for farms seized for business ventures in Yangon Region from 2004. He

threatened to sue the government if it did not recognise that he had been permitted to seize

the contested land under the former military regime.53

Among the NSAGs, the KNU is working on a land policy to protect lands from

confiscation belonging to those of the Karen ethnicity within its control areas. The ethnic

armed group will start documenting land confiscation cases to be proposed to the

government. This was announced by Padoh Saw Dot Lay Mu, head of the KNU‟s

Agricultural Department, during a land policy workshop in Karen state near the Thai

border from July 23 - 25, 2013.54

The KNPP is also helping locals to tackle confiscation claims over lands they say were

taken for the construction of a government military training school in Pharuso township.

48

http://www.thejakartapost.com/news/2013/07/19/myanmar-military-return-18000-acres-confiscated-

land.html 49

http://elevenmyanmar.com/national/3716-army-returning-seized-lands-in-rakhine-state 50

http://elevenmyanmar.com/business/1688-myanmar-s-mk-group-plans-a-joint-venture-with-a-thailand-

company 51


http://www.dvb.no/news/land-seized-by-crony-companies-to-be-returned-to-locals/28966 53


http://karennews.org/2013/07/the-knu-land-policy-to-go-to-the-burma-government.html/

http://www.thejakartapost.com/news/2013/07/19/myanmar-military-return-18000-acres-confiscated-land.html

http://www.thejakartapost.com/news/2013/07/19/myanmar-military-return-18000-acres-confiscated-land.html

http://elevenmyanmar.com/national/3716-army-returning-seized-lands-in-rakhine-state

http://elevenmyanmar.com/business/1688-myanmar-s-mk-group-plans-a-joint-venture-with-a-thailand-company

http://elevenmyanmar.com/business/1688-myanmar-s-mk-group-plans-a-joint-venture-with-a-thailand-company


http://www.dvb.no/news/land-seized-by-crony-companies-to-be-returned-to-locals/28966


http://karennews.org/2013/07/the-knu-land-policy-to-go-to-the-burma-government.html/


42

Economic Grievance 4: Environmental and social

impacts of development projects on local communities

Problem background

Development projects initiated by the previous SLORC/SPDC regime focused on rapid

economic growth with little regard for environmental or social impacts. The 1990

ceasefires were especially instrumental in opening up ethnic regions to mass

development/extraction projects. This led to an increased military presence and further

mistreatment of locals by authorities that often were not only forced to relocate but used as

forced labour in the construction of projects and infrastructure. Large scale development

projects have also caused destruction to the environment and cultural heritage sites,

perhaps the most sensitive case being the Myitsone Dam, expected to flood one of Kachin

state‟s most sacred sites. Severe social consequences have also resulted from large scale

developments. These include increased tensions between migrant workers and locals, an

increase of drug abuse, gambling and the sex trade.

For details please see reports by the following environmental rights groups:

1. Burma Rivers Network + member groups

2. Dawei Watch

3. Earth Rights International

4. Kachin Development Network Group

5. The Karen Environmental and Social Action Network

6. Karenni Civil Society Network

7. Shan Sapawa Environmental Organisation

8. Shwe Gas Movement

9. Ethnic Community Development Forum

10. Arakan Oil Watch

11. Salween River Watch

12. Landcore Group (Food Security Working Group)

13. The Border Consortium (formerly the Thai-Burma Border Consortium )

14. Forest Resource Environment, Development and Conservation Association

Attempted Solution 1: Improving management and

assessment of development projects

Civil society groups have been strong in advocating on behalf of locals. They are

collecting information, campaigning and lobbying the government, NSAGs and companies

to follow through with the Environmental Impact Assessment (EIA), Social Impact

Assessment (SIA) and the Free Prior Informed consent (FPIC). An important suggestion


43

from experts, activists, and now the government, is the need to increase the role of civil

society groups as a voice for local concerns in decision making about development projects

and policy reforms.

In the peace negotiations, CNF has requested assessments and formed an independent

commission to ensure public consent on large scale projects. KNPP has also requested

setting up a monitoring team for the construction of large scale dams. Environmental

issues are included in the WGEC‟s transitional arrangements (cultural and economic

arrangements, and natural resource management) and dialogue issues (questions about

sustainable economic development). KNU also agreed with the government in their peace

agreement to “support the basic needs of the people and ensure that development projects

have the full participation and support of local villagers”.

The government has responded to some opposition to large-scale projects. For example, a

proposed coal power plant in Taninthayi region for the Dawei project was cancelled after

No. 2 Electrical Power Ministry “read articles in the media”. It has been heralded as a case

wherein the government was "listening to the people's voice.”55

The Tamanthi and

Shwezaye dams were cancelled by the Indian government investors in June 2013.

Opposition from local groups over environmental impacts has been cited as a key factor for

the cancellation; it was also considered financial unfeasible by India's National

Hydroelectric Power Corporation (NHPC). To much of the world‟s surprise, the

government also stalled the controversial Myitsone Dam project, citing environmental and

social impacts.56

General efforts to improve governance and move towards decentralisation of power are an

important factor in improving management of development projects, making responsible

authorities more accountable and able to address local needs and grievances. For examples

please see: Economic grievance 2’s “Solution 1: Institutionalising management power of

natural resources and revenues” and “Solution 3: Improving governance”.

Beijing‟s Global Institute of Energy and Environmental Change announced on September

4, 2013 they will provide Environment Impact Assessment (EIA) training for Myanmar

MPs and Environment and Forest ministry staff. Following the training they will be sent on

tours of rural areas in China for studies on implementation of environment protection

schemes.57

Another potentially relevant solution is the Ethnic Rights Protection bill proposed by

Kutkai Constituency representative U Ti Khun Myat. The bill aims to safeguard ethnic

rights through legal channels. It states that the protection of ethnic rights may help to

increase the consideration and respect for social concerns in light of large scale

development projects.58

55

http://www.mizzima.com/news/inside-burma/6379-coal-power-plant-in-dawei-cancelled.html 56

http://www.nationmultimedia.com/breakingnews/Ital-Thai-dam-project-halted-30206779.html 57

http://www.mizzima.com/news/regional/10009-china-to-train-myanmar-mps-on-environment-assessment 58

Voice weekly on Aug 6


http://www.nationmultimedia.com/breakingnews/Ital-Thai-dam-project-halted-30206779.html

http://www.mizzima.com/news/regional/10009-china-to-train-myanmar-mps-on-environment-assessment


44

Attempted Solution 2: Corporate Social Responsibility

(CSR)

An important solution commonly raised by experts and civil society groups is the need for

companies to conduct corporate social responsibility that ensures proper EIA and SIA are

completed, and that business practices are done both ethically and responsibly to minimize

damage to the local society and environment. Another common suggestion is to publish the

EIA and SIA reports and findings in the local language and make them publically

accessible; something that most companies have not done. By concealing assessment

reports, many companies have been allowed to continue projects despite negative ESIA

findings showing potentially severe damage to both society and environment. Better

communication with local communities will allow companies to gain trust and support for

their projects.

Chinese companies in Myanmar have earned a bad reputation over the past two decades for

their investment projects. Some are now trying to make amends by implementing social

projects for affected populations. For example, the China National Petroleum Corporation

(CNPC) is providing schools and medical facilities along the gas pipeline area.59

However

as the KDNG found with the China Power Investment Corporation‟s model village built

for villagers displaced by the Myitsone dam, things are not always as they seem; the

quality of the houses and land provided for farming was found to be substandard.

Moreover, heavy surveillance of the village by soldiers has severely limited the residents‟

freedom. Such cases show that ensuring the quality and effectiveness of CSR is equally

important.

59

http://www.irrawaddy.org/archives/40242 ; http://news.xinhuanet.com/english/china/2013-

05/27/c_132412183.htm


http://news.xinhuanet.com/english/china/2013-05/27/c_132412183.htm

http://news.xinhuanet.com/english/china/2013-05/27/c_132412183.htm


45

Economic Grievance 5: Poverty and underdevelopment

in ethnic nationalities areas

Problem 1: Underdevelopment of ethnic nationalities areas

Though concrete statistics are unavailable or unreliable, it is generally understood that

rural ethnic nationalities areas suffer higher rates of poverty than urban centers. This is due

in large part to the protracted civil war that resulted in the military‟s “Four Cuts” policy.

These include: a) Cutting and blockading of communications between rebel armed groups

(b) Embargo of people and consumer goods entering rebel territories (c) Search and

destruction of core members responsible for supply, information, funds and recruits (d)

Embargo on trade to reduce rebel revenue.

In rural areas there is very poor infrastructure in the way of roads, water supply, electricity

and telecommunications. Educational standards and health services also lag far behind the

urban centres. Despite the country‟s massive energy output that constitutes large parts of

national export product and revenues the majority of the population lives without

electricity.

According to a report in state-run Myanmar Alin (New Light of Myanmar), 74 percent of

Myanmar nationals are not connected to the national power grid, while the other 26 percent

do not have 24-hour access.60

A map below depicting the night lights of Myanmar shows

that most of those without electricity reside in border regions and ethnic nationalities areas.

Ironically, many hydropower plants are also located in these ethnic areas. Unlike other

countries where border and coastal areas tend to be more prosperous due to trade

opportunities with neighbouring countries and the international market, this is not the case

in Myanmar because of decades long civil conflict, instability and economic

mismanagement .

60

Myanmar Alin, September 13, 2013.


46

Map of electricity usage in Myanmar and neighboring countries

Problem 2: Balancing growth and sustainable

development - lessons from the 1990s ceasefires

While it is important to ensure development and poverty eradication during the political

process, many have voiced concern that development plans are shifting the focus of

ceasefire talks towards a business agenda.61

This is premised on the belief that the security

situation is still not stable enough and not yet ready for large-scale development projects.

Following the detrimental experiences of the 1990s ceasefires, many are skeptical about

business interests having any place in the peace process, saying it is the government‟s

attempt to make NSAG leaders “mini-cronies,” luring them away from their original

ambitions of political autonomy and ethnic rights with capital incentive. Additionally, if

these projects are unregulated and without proper safeguards, some fear that they may

create negative impacts on society, creating more grievances that harm the overall peace

process.

Following the recent ceasefires, there are concerns that the government has started and

restarted large scale projects. One example is the Tasang Dam that had been previously

stalled due to conflict, but was restarted in 2012 after a ceasefire was signed with the

61

for example, see interview with KNU‟s General Baw Kyaw Heh http://karennews.org/2013/09/knu-gen-

baw-kyaw-heh-exposes-how-ceasefire-agenda-has-shifted-to-business.html/

http://karennews.org/2013/09/knu-gen-baw-kyaw-heh-exposes-how-ceasefire-agenda-has-shifted-to-business.html/

http://karennews.org/2013/09/knu-gen-baw-kyaw-heh-exposes-how-ceasefire-agenda-has-shifted-to-business.html/


47

RCSS/SSA.62

New economic and business initiatives have increased after a ceasefire was

signed with the KNU. For example, three new SEZs and SIZs in Karen state capital Hpa-

an and the border towns of Myawaddy and Three Pagoda Pass were announced following

the ceasefire. Mining concessions in Shan state have also increased since 2011, with 46

mining companies being granted 276 concessions (mostly to UMEHL) covering a total of

28,325 acres in 11 townships.63

Participants at a people‟s forum in Karen state in October 2012 was attended by thousands

of residents affected by the conflict. During the forum there were recommendations to

suspend large scale projects while peace negotiations are underway. Participants also want

to include local organisations in the decision making process to promote sustainable peace

and development. Moreover, they stressed the importance for both the government and

KNU (NSAG) to address land issues related to the ownership of natural resources.64

Attempted Solution 1: Development projects related to

peace negotiations

In spite of the dangers related to development projects, most NSAGs are using the peace

talks as a platform to negotiate for development projects in their areas as a way to alleviate

poverty. The demands for development may also be a reflection of the third point of the

government‟s eight-point peace plan “to cooperate in economic and development tasks”.

Under the WGEC‟s peace framework, economic power-sharing under transitional

arrangements also includes the point, “Ethnic armed groups participate in the adoption of

economic development projects that affect the well-being of their populations.”

Listed below are development requests made by NSAGs during peace negotiations with

the government.

Infrastructure and economic incentives

CNF

1. Establish a committee or organization to carry out development works in

cooperation with domestic and international non-governmental organizations.

62


According to Shan Sapawa presentation on 8 Sept 2013. 64

Press Release November 6 , 2012 War-affected Karen communities urge suspension of mega development

projects during peace process http://kordcentre.org/wp-content/uploads/2012/11/Press-Release-

_English_1.pdf


http://kordcentre.org/wp-content/uploads/2012/11/Press-Release-_English_1.pdf

http://kordcentre.org/wp-content/uploads/2012/11/Press-Release-_English_1.pdf


48

a. 11 March 2013: Began tests for metal mineral exploration in Chin state

(nickel, chromite, coal and copper vein, shallow oil wells).

2. Allow international tourists to freely travel in and out of Chin state to promote

tourism.

a. 15 Aug 2013: Plans to establish tourist sites at Rih Lake, Bawipa and

Zinghmuh mountains in Chin state.

3. Establish a SEZ.

4. Develop a national highway that connects all the towns in Chin state.

a. July 2013: CNF and three other local companies won tenders to build 15

mile roads that will make up a highway.

5. Union government shall construct at least one airport.

a. 19 December 2012: The government is building a domestic airport in

Surbung Mountain in Falam township, Chin state. The site was surveyed by

the CNF‟s delegation with the administrator of Falam township and the

local participation.

6. Establish an organising committee.

7. CNF has the right to seek funding for development projects.

8. Provide basic services such as clean water and electricity, food security, healthcare

and education.

DKBA

1. Regional development, settlement of members of Kalo Htoo Baw group and their

families, improvement of socio- economic status in Sukali region.

KNPP

1. Electricity in all of Kayah (Karenni) state.

a. The Kayah state government said that 40 villages in Kayah state will

receive electricity in 2013-14 after permission to provide licenses is granted

to three companies.

2. The government and KNPP must cooperate for regional development.

KNU

No points were requested.

KPC

1. State allowance and assistance for self-reliant undertakings to quickly fulfill basic

needs of education, healthcare, transport, water and electrical supply.

2. More development of border trade and regional infrastructure.

3. Committment to allow Karen to cultivate their own land and utilise their own

natural resources to develop Karen state. This includes infrastructure, farming,

tourism, fisheries, import /export trade, schools, hospitals, medical care etc.


49

NDAA

1. Cooperation to improve tourism, mining, and electrical access in NDAA controlled

areas.

NMSP


PNLO

1. PNLO will submit a road construction proposal for Ka Du Gyi and Mae Aww.

Union government must assist and cooperate on agriculture-based development.

RCSS

1. Cooperation with Union government for regional development.

2. Establish special industrial zone in RCSS control area.

SSPP


UWSA

1. Agreement to adopt both short and long term socio-economic development plans.

Opening border trade: (following peace process 2011)

Tanintharyi: Htee Kee65

border trading post

KNU Chief Minister of

the Tanintharyi

region

May 12, 2013

Tanintharyi: Maw-taung (or

Maw Daung) border trading

post

KNU Opened May 7,

2013. Sin Khone

(Thai side) to open

Sept 2013

Sagaing, Pan Saung (trading

market)

Naga

Autonomo

us Region

Ministry of

Commerce

announced plans:

April 1, 2013

Border Trade BP 13 KNPP to

consider

Kayah State

Ministry of

Transport

Reported on July

19, 2013. 3000

million kyats (about

65

http://karennews.org/2013/05/border-crossing-goes-legal.html/

http://karennews.org/2013/05/border-crossing-goes-legal.html/


50

US$3 million) to

build a road that

links to Thai-Kayah

(Karenni) after

ceasefire.66

Menglian Wa autonomous

county (Yunnan Province)

bordering the Wa controlled

territory in Myanmar

designated Border

Cooperation Zone

UWSA Early Nov 2012

kicking off 1.95

billion yuan (US

$310 million) in

infrastructure

projects.

SEZs and SIZs Despite controversies over the negative impact of SEZs and SIZs on local populations, two

NSAGs have requested that the government create special zones in their areas, hoping this

will lead to a boost in economic development and job creation. During peace agreements,

CNF asked for an SEZ in Chin state and the RCSS requested an SIZ in Mong Hta, Shan

state, near the Thai border. Neither has yet been designated.

Social services and education

Another major demand in peace agreements is improving social services

CNF

1. The Chin National Front, the Union and State Governments shall cooperatively

work together to promote information technology and computer skills in Chin state.

a. 13 August 2013 CNF released a tender notice in the government newspaper

Kyaymon (the Mirror) for an educational development project. They are

calling for 905 computers, 35 satellite internet, 30 Generators and

Dynamos, 4 routers and accessories.67

b. 11 June 2013, MPSI vowed to work with CNF to install internet in all of the

thirty high schools in Chin state, and hold classes to promote IT and

computer skills. A total of 90 computers were offered.

KNPP

66

http://ktimes.org/index.php/news/692-2013-07-18-17-35-42 67

Mirror (Kyaymon) newspaper, 13 August 2013

http://ktimes.org/index.php/news/692-2013-07-18-17-35-42


51

1. Cooperate with INGOs and NGOs on health, education and social development in

collaboration with the Kayah state government.

KNU

1. Support the basic needs of the people

a. 19 April 2013: For the first time the Karen Education Department and the

Karen Teachers Working Group held a summer camp for teacher training.

b. 23 May 2013: Meetings between Karen Department of Health and Welfare

and the government‟s Health Directorate for Karen State. Plans to deliver

much needed healthcare will be announced. The two groups met in

Myawaddy and agreed to work towards better coordination of healthcare

services in Karen state.

c. Big Tiger Foundation to provide medical care and basic supplies to poor

patients, starting August 31, 2013.

DKBA – No points were requested

NDAA

1. The Union government must agree to adopt long-term plans for cooperation of

local people in treatment, prevention and education of health care to national

people in Special Region 4 and ensure that healthcare expertise is acquired in the

region.

NMSP

1. Work towards stability and development of education, healthcare and social sector

in coordination with ethnic nationalities, armed organizations and the government

as the ceasefire comes into effect.

PNLO

1. PNLO will cooperate with the Union government, state government and local

authorities to implement education, healthcare and agriculture-based development.

RCSS

1. Assist and coordinate with NGOs and INGOs.

SSPP – No points were requested.

UWSA

1. The Union government must agree to increase opportunities for ethnic nationality

youths in Wa Special Region 2 to pursue education with the goal of developing

insights, receiving vocational training and developing human resources.


52

2. The Union government must agree to adopt long-term plans for cooperation of

local people in treatment, prevention and education of healthcare for ethnic

nationals in Wa Special Region 2 and ensure that healthcare expertise is acquired in

the region.


53

Attempted Solution 2: Government’s overall national

and border area development plans

Border affairs ministry

Developing border areas has been part of

the government‟s overall strategy to tackle

the problems of ethnic nationalities and

civil conflict since the transitional military

regime took power in 1988. Under the

previous military regime (SLORC/SPDC),

the Border Affairs ministry was chiefly

responsible for carrying out border area

development as part of broader peace and

stability measures. Its aim is to assist

systematic plans to integrate national armed

into the legal fold. The ministry is one of three headed by the military, which suggests that

development is driven by the military as opposed to economic strategy. Moreover, its role

and strategies as outlined on the official website continue under SPDC plans and hence

appear out of line with the rest of the reforms. The ministry keeps a low profile in the

current peace process, which has been dominated by the Myanmar Peace Center, but at the

same time it is still active in overseeing development projects in border areas, and is

present - though not prominent - during ceasefire meetings.

Despite the importance of the ministry in border security and its ambitious development

plans, very few people - including those involved in the peace process - are familiar with

these plans. The significance of this development program from the perspective of the

government can be deduced from the 21 predominantly military members of the policy

making central committee chaired by the president. Most people in Myanmar are only

aware of a school operated by the ministry to train ethnic nationality youths into

government civil servants in their respective home areas.

The Border Affairs ministry‟s vision for development as peace is wide-ranging: from

socio-economic development, poverty alleviation, designating SEZs, launching

microfinance schemes, implementing infrastructure projects, protection of religion and

culture, and poppy eradication. It has an ambitious plan to cover all aspects of development

from large too small.68

With a mission so vague and diverse, it is difficult to monitor

exactly how much is being implemented and its effectiveness. As the stated functions of

the ministry do not neatly match with its working subcommittees or measures taken for

development, this suggests some disorganisation of the ministry‟s structure, calling its

68

http://www.mba.gov.mm/eng/node/227

http://www.mba.gov.mm/eng/node/227


54

effectiveness into question. Its militaristic and nationalist mission is also still present in the

functions list that is listed below:

9. To nurture all national people to constantly safeguard non-disintegration of the

Union, non-disintegration of national solidarity and perpetuation of sovereignty.

…..

14. To make arrangements for the promotion and propagation of the Sasana in the

border areas.

Another sign that the ministry is out of line with reforms is that its projects are based on

previous ceasefire areas that have changed following recent breakdowns. The ministry‟s

enigma is heightened by limited information about how it functions and what it has

achieved. The only news regarding its current progress was found on April 24, 2011 when

Myanmar Union Minister at the President's Office U Thein Nyunt (former Border Affairs

minister under the SPDC regime) vowed to further carry out border area and ethnic

nationalities development in the new government, claiming that, “a state fund of over 212

billion kyats (about US$235 million) was used” in a host of different border area

development projects.69

Again, it is difficult to assess real impacts on the ground.

Based on the “Development of Border Areas and National Races Law” in Law No.11/93,

amended in 1996, there is a “Master Plan for the Development of Border Areas and

National Races” drawn up in 1993 in both short and long term phrases. According to the

ministry website, “a 30-year long term plan for the development of border areas and

national races, starting from 2001-2002 fiscal years up to 2029-2030 fiscal years”. The

details of this plan are still unknown. Nor is it known how the plan fits in with the current

reformist government‟s peace plans and their overall national reforms. For example, the

ministry is responsible for implementing donor projects in border regions; this includes

two Nippon Foundation projects to build schools in Rakhine state.70

More information

transparency would improve understanding of how this ministry supports or contradicts the

current peace talks led by Aung Min and the Myanmar Peace Center.

National development plans The development of ethnic nationalities and post conflict areas is also highly dependent on

the overall national economic development plan. The Thein Sein government has been

pushing its first five year “National Comprehensive Development Plan” (2011-2016)

targeting „People Centered Development‟. It is made up of four pillars of reforms:

political, economic, public administration and private sector development.71

It has also

promised to ensure balanced and proportionate development among regions and states

allowing for inclusive growth of the entire population.

69

http://english.people.com.cn/90001/90777/90851/7359690.html 70

see http://www.mba.gov.mm/eng/natala/cooperation-un-agencies-bilateral-and-ingos-under-process and

http://www.mba.gov.mm/eng/natala/uningos-be-cooperated-and-implemented 71

http://www.elevenmyanmar.com/business/3416-myanmar-to-investors-more-reform-ahead

http://english.people.com.cn/90001/90777/90851/7359690.html

http://www.mba.gov.mm/eng/natala/cooperation-un-agencies-bilateral-and-ingos-under-process

http://www.mba.gov.mm/eng/natala/cooperation-un-agencies-bilateral-and-ingos-under-process

http://www.mba.gov.mm/eng/natala/uningos-be-cooperated-and-implemented

http://www.elevenmyanmar.com/business/3416-myanmar-to-investors-more-reform-ahead


55

Thein Sein‟s announcement of a people-centered development priority on August 9, 2013,

after serving the last 30 months of his term in office, appears to be an effort to add more

steam to the reform process. Four ministers at the President's Office have been appointed

as coordination ministers to facilitate the various ministries and state or region

governments (U Soe Thein, economic reform; U Aung Min, political reform; U Tin Naing

Thein, private sector development and reform; U Hla Tun, administrative reform). These

designated ministers are part of the National Reform Steering Committee led by the

president and formed in August 2013 to replace the former project commission.72

The government has pledged to reduce poverty to 16 percent by 2015, and its National

Comprehensive Plan contains an eight-point rural-development and poverty-alleviation

scheme targeting the 70 percent of the population residing in rural areas.73

The duration of

the plan implementation is from July 1, 2011 to December 31, 2015.

1. Development of agricultural production sector

2. Development of livestock and fisheries

3. Development of rural productivity and cottage industries

4. Development of micro saving and credit enterprises

5. Development of rural cooperative tasks

6. Development of rural socio-economy

7. Development of rural renewable energy

8. Environmental conservation

The plan was created during a three day workshop, “National Level Workshop on Rural

Development and Poverty Alleviation,” held in Naypyidaw on May 20, 2011. It is also

part of an effort to meet UN millennium goals based on an all-around survey of household

living conditions, jointly conducted by the UNDP, Ministry of National Planning and

Economic Development between 2009 and 2010. Several committees were created to

implement the plan, including a union level central committee (to adopt and supervise

policy), union level work committee (ministers to take charge of each task) and region and

state level work committees (to cooperate with rural people in 330 townships and 82 sub-

townships).

In his Peasant‟s Day speech on March 2, 2012 President Thein Sein elaborated on his rural

reform plan by emphasizing the need to catch up with neighboring agro-based economies

in the following five ways:

1. enthusiasm

2. mindset change

3. land reform

72

http://www.globaltimes.cn/content/811040.shtml#.UjLV12SSDig 73

http://www.myanmargeneva.org/11nlm/jun/n110621.htm , http://www.president-

office.gov.mm/en/?q=issues/rural-urban/id-1845

http://www.globaltimes.cn/content/811040.shtml#.UjLV12SSDig

http://www.myanmargeneva.org/11nlm/jun/n110621.htm

http://www.president-office.gov.mm/en/?q=issues/rural-urban/id-1845

http://www.president-office.gov.mm/en/?q=issues/rural-urban/id-1845


56

4. mechanization

5. using high-yield strains.

According to a Global Times report, several foreign countries and international aid

organisations have already agreed to assist Myanmar‟s agricultural sector, including Japan,

Thailand, Philippines and Vietnam.74

Seven Points Development Plan or, Eco-Social Development Plan

A seven point development plan was announced on August 9, 2013 for the ruling

government‟s remaining 30 months in office.75

1. Electricity (fully implement regular electricity available in Yangon and Mandalay,

and increase the number of households that have access electricity in all regions

and states)

2. Drinking water (sufficient supplies for Yangon and Mandalay, increase the

percentage of water available for households in townships located in regions and

states.)

3. Agriculture (sufficient water for managing agriculture, distribution of enough seeds

for crop cultivation, to fulfill capital needs, e.g. loans)

4. Creating jobs (develop industrial zones and SME; increase employment through the

development of infrastructures and housing; establish special economic zones)

5. Tourism (develop more tourism infrastructure)

6. Financial sector (to develop the banking sector; stabilise financial markets; develop

small and medium loaning sectors; establish working groups for the

implementation of foreign loans and related matters).

7. Trading and investment (establish working groups to develop these sectors).

The government has been quick to implement this new policy. On August 13, government

representatives from the President's Office held a forum in the Mon state capital of

Mawlamyine to brief the seven point developmental plan and discuss the southeastern

region‟s need for economic and infrastructural growth.76

Other attempts by the government to tackle poverty include the Myanmar Employment and

Skills Development Law that came into effect on August 30, 2013. The Employment and

Skills Development Law covers job creation, reducing unemployment, developing

discipline and capability of employees. The law also covers systematic and technical

training, dispatching employees to external training courses to improve their skills in the

74

see for details: http://www.globaltimes.cn/content/765366.shtml 75

http://www.president-office.gov.mm/?q=briefing-room/news/2013/08/12/id-4031 76

http://phophtawnews.org/english/index.php/news/local-news/item/348-delegation-from-naypyitaw-details-

country-plan-to-mon-state.html

http://www.globaltimes.cn/content/765366.shtml

http://www.president-office.gov.mm/?q=briefing-room/news/2013/08/12/id-4031

http://phophtawnews.org/english/index.php/news/local-news/item/348-delegation-from-naypyitaw-details-country-plan-to-mon-state.html

http://phophtawnews.org/english/index.php/news/local-news/item/348-delegation-from-naypyitaw-details-country-plan-to-mon-state.html


57

workplace. Myanmar's National Skill Standard Authority (NSSA) was also founded to

provide skill training courses to meet 2015 ASEAN job market demands.77

SEZs and SIZs are an important part of the government‟s plan for job creation, economic

development and growth. Currently there are three large-scale SEZs (in Kyaukphyu,

Thilawa and Dawei) and nineteen smaller SEZs and SIZs in the rest of the country. Plans

for a new SEZ in Muse were announced on June 15, 2013. India has offered US$150

million of credit for project exports in June 2013 for the establishment a SEZ in Sittwe in

Rakhine state.78

77

http://www.mizzima.com/news-91481/prisoner-watch/9972-employment-and-skills-development-law-

takes-effect-in-myanmar 78

http://www.hindustantimes.com/business-news/WorldEconomy/India-to-provide-150mn-to-set-up-SEZ-

in-Myanmar/Article1-1073516.aspx

http://www.mizzima.com/news-91481/prisoner-watch/9972-employment-and-skills-development-law-takes-effect-in-myanmar

http://www.mizzima.com/news-91481/prisoner-watch/9972-employment-and-skills-development-law-takes-effect-in-myanmar

http://www.hindustantimes.com/business-news/WorldEconomy/India-to-provide-150mn-to-set-up-SEZ-in-Myanmar/Article1-1073516.aspx

http://www.hindustantimes.com/business-news/WorldEconomy/India-to-provide-150mn-to-set-up-SEZ-in-Myanmar/Article1-1073516.aspx


58

Economic Grievance 6: Market competition between

racial groups

Problem background

According to many analysts, the recent communal violence and anti-muslim sentiments is

also said to have economic roots. The “969” Buddhist movement led by a monk Wirathu,

claims that it is a retaliation to the Muslim “786”, a number prominently found on all

Muslim businesses and shops throughout the country. The symbolic number used in South

Asian Muslim tradition to represent the Quranic phrase “In the name of Allah, the Most

Gracious, the Ever Merciful”, has been said to be a long standing misinterpretation by the

Myanmarese as a Muslim conspiracy to take over the world in the 21st century, as they see

786 to represent 21 (7+8+6=21).79

This alleged fear is aggravated as Muslims dominate

some small and medium sized business sectors, while large Muslim-owned construction

companies like Naing Group, are gaining prominence in the business world under the new

government.

Anti-Muslim sentiments can be seen to be part of the country‟s overall xenophobia, deep

rooted from the days of British colonialism when foreigners were given economic

privileges over natives. The cartoons below from a 1939 book The Immigration Problem of

Burma by Thein Maung, and included as evidence in the government‟s Interim Riot Report

of that same year, were used as nationalist propaganda and expresses the strong anti-

immigrant sentiments of its time. Muslims in Myanmar today continue to be portrayed as

dangerous foreigners that aim to dominate the country in every aspect from the economy,

society and politics. The segregation of Muslims due to religious and dietary customs that

prohibit them from frequenting Buddhist restaurants for example, makes the religious

cleavages more salient.

79

http://www.asiasentinel.com/?id=5276&Itemid=208&option=com_content&task=view

“Burmese Neo-Nazi Movement Rising Against Muslims”, Kosak Tuscangate, 22 March 2013

http://www.asiasentinel.com/?id=5276&Itemid=208&option=com_content&task=view


59

(L) "Frightened from the south and taken away from the north, the man in the middle is left

with an empty stomach"; (R) "Crowded out by the guests, such is the lot of the Burmese".

First published in The Immigration Problem of Burma by Thein Maung (1939). Images

from Michael Adas‟s The Burma Delta (1974), courtesy of the British Museum.80

According to the 2013 Rakhine state Investigation Commission report on Rakhine state

communal violence, conflicts over resources between Rakhines and Muslims is cited as an

important cause of friction. The Rakhine have expressed concern that Rohingyas are trying

to take control of their economy and resources in their area, for example land in several

townships in Rakhine state are mostly owned by Rohingyas e.g. Myaypon township 85%,

Maungdaw 85.66% and Buthidaung 84.75%. The Investigation Commission‟s report hence

80

The Burma Delta. Economic development and social change on an Asian rice frontier, 1852–1941,

Madison, Wisconsin: Univ. of Wisconsin Press, 1974, pp195


60

suggested using economic and local development as one tool in solving the conflicts

between Rakhine and Rohingya communities.

Attempted Solutions

Racial and religious violence remains a highly sensitive issue in Myanmar. Currently most

of the activities to tackle communal conflict are interfaith activities in Yangon such as

workshops and personal exchanges to better understand each other. However none have

been held in Rakhine state. Education has been suggested as an important solution by the

Rakhine State investigation commission, and legal protection is an ongoing issue that has

been raised. One issue that has not been discussed much is tackling economic roots such as

competition between different racial groups for land ownership and market dominance.

Observations Economics is inextricably linked to peace negotiations and power politics, especially when

considering issues of ownership and management power over natural resources in ethnic

regions, legal sustainability of NSAGs and tackling socio-economic inequality in ethnic

areas. The question then remains, how to effectively use economics as a tool to benefit the

peace process and ensure a win-win situation for all. Below are some suggestions for key

actors based on this report‟s findings.

Government The government holds the largest responsibility in driving economic policy that will

determine whether grievances fueling conflict can be solved or aggravated. The reformist

government has initiated a host of new policies and committees that have tried to address

the many problems raised. Whether these are really functional and efficient remains to be

seen. At present, the large number of new initiatives and speed of reforms make the

process extremely complex and difficult to monitor.

One important issue that holds back reforms and prevents real implementation is the

tendency of the military to obey its own command over the government‟s, as well as its

continued dominance over the economy and government structures.

Recommended Military reforms:

1. Reform the military to support the democratic reform process (especially

cooperating better in enforcing ceasefire terms promised by the government to

NSAGs)

2. Continue strengthening state level administration to reduce its dependence on the

GAD and Home Affairs ministry)


61

3. Reform the Border Affairs ministry and reconsider its alignment with the 2011

government peace plan and its role in the peace process

4. Reduce the military‟s dominance in the economy by reconsidering the need for

UMEHL and MEC

Recommended governmental reforms to address conflict-related grievances:

1. Improve institutions to enforce the law and promote good governance

a. constitutional provisions for clear natural resource sharing

b. strengthening the judicial system

c. tackling endemic corruption

d. improving transparency

e. increasing the role, power and budget of state governments

f. increasing stringency on selecting companies that have good CSR records

and committing to a clear set of standards/rules for them to follow

g. mandating and monitoring ESIA

h. including civil society in decision making to improve responses to local

needs and grievances

2. Enhance pro-poor development

a. welfare (education is extremely important to long term investment - for

improving human resource standards, quality of life, and the country‟s

overall future, health, employment assistance and facilitation)

b. supporting SMEs (funds, micro-loans, entrepreneurial support, cross border

trade, business training, holding more expos, promoting trade and

investment)

c. improving infrastructure (roads, telecommunications, access to internet,

public transportation, reliable electricity supply)

3. Righting the wrongs of the past (gain the trust of its people, especially ethnic

nationalities that have most suffered the costs of civil war. Also necessary in

ensuring the success of ceasefires)

a. reforming land laws

b. expediting the return of confiscated land

c. investing more in the development of SMEs and agricultural policies

d. anti-monopoly laws

e. anti-corruption laws

NSAGs

NSAGs should consider a grand strategy to attain political power, equal rights, ownership

and management power over natural resources in their regions for ceasefire talks and

ceasefire agreements with the government. To date there has not been a clear consensus or


62

expression of how they wish to resolve ownership and management power over natural

resources and revenues from their regions.

1. Maintaining a liberal and cooperative strategy to expedite the peace process for

national reconciliation.

2. Enhancing pro-poor development and responding to local needs

3. Responsibility to conduct legal and open businesses

4. Tackling internal corruption and increasing transparency

5. Formulate a clear and concrete strategy about what they really want in official

peace talks, including political power sharing and management over natural

resources in their respective regions

Foreign Governments 1. Urge responsible investment of national companies doing business in Myanmar

that are in line with the law

2. Development and Peace Process aid - ensure projects support government plans

and are accepted by NSAGs to avoid contradiction and confusion. Projects should

be sensitive to domestic politics, transparent and engage civil society groups

3. Continue emphasising foreign aid to improve governance by improving and

strengthening Myanmar‟s public administration and public policy

Businesses 1. Foreign and domestic business companies must get suggestions from locals and

consult with local people, and CBOs/CSOs if they would like to invest business

projects locating in ethnic area.

2. Business or development projects must not hurt the livelihood and ensure security

for local people. Large scale investments must avoid aggravating local grievances

and fueling conflict.

3. EIA and SIA must be done before kick off business or development projects and

publish the findings to local people with their language. EIA and SIA results must

be explained to local people.

Civil Society Groups 1. Continue serving an important role as a voice of the people and monitors of the

peace process

2. Uphold a good standard of reporting and professionalism

3. Cooperate with the government to encourage and strengthen reforms, participate in

government outreach activities or schemes that engage civil society


63

Appendix

[Attempted Solutions for economic grievances chart - summary sheet]

Documents

Economics of peace and conflict report english versioin